Donald Trump's victory in the 2024 U.S. presidential election sparked a surge in the cryptocurrency market, boosting Bitcoin's price and the overall market capitalization. However, Trump-themed tokens experienced the opposite.
Trump-Themed Tokens Spike
Trump-themed tokens rose sharply after the election results as traders sought to capitalize on his comeback. They reached all-time highs due to speculation and hype, but soon their value began to fall steeply. The main reason for this could be the return of capital to Bitcoin and Ethereum, leading to a shift away from riskier assets.
Liquidity Issues in Memecoins
The total volume of global crypto trading was $174 billion, with most transactions coming from large-cap cryptocurrencies. This resource relocation made it difficult for Trump-themed tokens to have liquid markets, resulting in price swings. These tokens suffer from low liquidity, complicating swaps with other cryptocurrencies.
Impact on the Cryptocurrency Market
Following Donald Trump's victory, Bitcoin's value rose to $76,943, and the total cryptocurrency market capitalization reached $2.51 trillion. This growth is attributed to increased interest in more stable cryptocurrencies. Despite the success of Bitcoin and other top cryptocurrencies, Trump-themed tokens lost more than half of their recent peaks due to the initial hype and subsequent decline in interest.
Trump's victory had a significant impact on the cryptocurrency market, boosting the popularity and value of Bitcoin and other major cryptocurrencies. However, politically themed tokens, despite their initial popularity surge, faced challenges due to low liquidity and capital flows to more stable assets.
