Trump secures victory, stimulating a surge in meme coins, with Dogecoin rising nearly 23%
After Trump secured victory, Meme coins surged broadly, with Dogecoin rising nearly 23% and Shiba Inu increasing by 8%. Bitcoin prices hit a new record of $75,000. Analysts pointed out that the rise of Meme coins reflects the risk appetite of retail investors, and despite their low market capitalization and liquidity, long-term investors should be cautious about the volatility of Meme coins. The cryptocurrency market may experience significant price fluctuations following the announcement of the election results
According to the Zhitong Finance APP, on Wednesday, Meme coins surged broadly as election results showed that former President Trump had secured at least 270 electoral votes.
Data from Coin Metrics indicated that Dogecoin soared nearly 23%, while Shiba Inu coin rose by 8%. Meanwhile, Bitcoin's price even reached a new record of $75,000.
"As the cryptocurrency market experienced low volatility before the election, with the industry hoping for clarity on future regulatory conditions, traders were prepared for volatility once the results began to emerge," said Chris Chung, CEO of Titan, a decentralized exchange aggregator built on the Solana blockchain. "As states announce election results, certain sectors driving price increases, such as renewed interest in Meme coins, may experience significant price fluctuations."
Before election day, Meme coins and AI-related crypto tokens outperformed the broader cryptocurrency market. This segment of cryptocurrencies is often used as an indicator of retail investor risk appetite.
Ryan Rasmussen, head of research at Bitwise Asset Management, stated in an interview that the increase in Meme coin activity indicates that retail investors are getting involved and are interested in further speculation along the risk curve.
He said, "Given the low market capitalization and liquidity of Meme coins, I am not surprised to see them surge alongside a broader cryptocurrency rebound. If cryptocurrencies are sold off, I expect Meme coins to experience similar sharp declines."
He noted, "I urge long-term investors not to focus too much on the movements of Meme coins. In the long run, there are few winners in the Meme coin market, and thousands of cryptocurrencies are issued every day; choosing a specific Meme coin is like buying a lottery ticket."
As investors closely monitor the results of the U.S. presidential election, the cryptocurrency market seems to be preparing for a Trump victory. The former president is viewed as a more favorable candidate for the broader cryptocurrency market beyond Bitcoin, as he has promised a friendlier approach from the SEC towards the cryptocurrency market if re-elected.
"Trump is largely seen as very positive for the cryptocurrency market, and any signs of a potential victory could quickly drive prices up in anticipation of significant capital being deployed," Chung said.
Nic Puckrin, co-founder and CEO of the cryptocurrency education platform Coin Bureau, stated, "Dogecoin may also be in demand due to the very real prospect of 'Musk (a long-time supporter of Dogecoin) possibly being appointed as the head of the Department of Efficiency in the Trump administration.'" This statement refers to comments made by Trump in September, when he stated that he would appoint the CEO of Tesla (TSLA.US) to the "Government Efficiency Committee." Musk has previously referred to himself as the "Dogecoin Godfather" and has publicly commented on Meme coins influenced by him. Subsequently, he referred to the committee on the social media platform X as the "Department of Government Efficiency," abbreviated as "D.O.G.E."