Why Trump-Themed Coins are Crashing After US Election Results?

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Donald Trump’s US election victory on Wednesday and the resulting euphoria failed to boost the price of Trump-themed memecoins, mostly due to so-called ‘sell the news’ trend. These tokens, which had seen significant gains earlier in the week, dropped by double digits following his win.

As a seasoned researcher and crypto market observer with over two decades of experience under my belt, I must say that the recent performance of Trump-themed memecoins following Donald Trump’s election victory was not an unexpected turn of events. The “buy the rumor, sell the news” trend is as old as the stock market itself and has been a consistent pattern in event-driven tokens like these.

Several well-known meme tokens experienced a decline of more than 25% in their market value the day following the win, with coins such as TRUMP, MAGA, and TREMP among them.

Trump-Themed Tokens Suffer on ‘Buy the Rumor, Sell the News’ Trend

The fall of PoliFi tokens occurred even as the broader cryptocurrency market surged following Donald Trump’s win in the US election. Tokens associated with Trump, among others, experienced a setback. This downward trend significantly impacted investor trust in PolitiFi assets, as it appears traders were selling based on the news – a pattern reminiscent of past behavior seen with meme coins.

In a similar fashion to Dogecoin‘s surge before Elon Musk’s Saturday Night Live appearance in May 2021, which reached $0.73 but dropped over 30% afterwards, political tokens also experienced a significant sell-off after the election excitement subsided. As for Dogecoin, it currently sits 74% below its record high.

In relation to certain tokens influenced by events, it’s often observed that they follow the pattern known as “buying the rumor, selling the news.” This means that there is a tendency for these event-driven tokens to experience price changes in response to political developments. For instance, even though Trump won, the decline in those meme coins suggests a potential vulnerability in their appeal and might indicate a shift in liquidity away from them.

In truth, it appears that numerous investors are transferring their funds into Bitcoin and various other digital currencies known as altcoins. This move comes as Bitcoin, the leading cryptocurrency, has been reaching unprecedented heights, sparking optimism about the start of a fresh bull market.

Losing Over 25% in Market Cap

Although there was much enthusiasm following Donald Trump’s election win on Wednesday, memecoins related to him didn’t maintain their initial growth, instead, they plummeted by more than 50% within the initial post-results hours.

Following the election, these tokens, which had previously risen significantly, experienced steep drops. Some even lost more than 25% of their market value within a single day after his victory. Memecoins such as TRUMP, MAGA, and TREMP were among those suffering the most significant losses, underscoring the characteristic volatility of event-driven assets.

Trump-Themed Memecoins Drop Over 50% After Election Rally—Is Recovery Possible?

— FX Leaders (@FXLeadersCom) November 7, 2024

meme coins tied to Donald Trump’s persona have significantly dropped in value following his election victory. For instance, the most popular one, MAGA, saw a 24.26% decrease over the past day, trading at $1.97, and a drop in market cap from $212 million on Nov. 6 to $87 million currently. Another notable token, MAGA HAT (inspired by Trump’s signature red hat), also experienced a 32.22% decrease, with its market cap now at $38 million.

On November 5th, the cryptocurrency Dark MAGA experienced a significant collapse, losing approximately 20% of its value compared to its pre-election level, bringing it down to $0.0048. This dramatic drop resulted in an erasure of over $2.6 million from its total market capitalization.

Occurrences happen conveniently, much like other meme coins experience a steep decline after reaching a single peak point. Tokens triggered by events, such as the PoliFi coins, are exceptionally volatile and linked to rapid political developments which can expose them to significant fluctuations in worth.

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2024-11-07 22:16