The cryptocurrency landscape continues to evolve with new categories emerging, such as PolitFi, which intertwines politics and crypto. Recent discussions in the Turkish Grand National Assembly have included pilot regions for Bitcoin payments and the costs of crypto mining. In the US, political parties are appealing to crypto-friendly voters. Despite the hype, PolitFi tokens, particularly those launched in the name of political figures like Trump and Biden, are experiencing significant downturns as the November elections draw near.
Why Are PolitFi Tokens Declining?
Before the upcoming elections, expectations were high for PolitFi tokens to gain traction. However, the Solana-based Jeo Boden (BODEN) token, which blends Joe Biden and Donald Duck, plummeted by 70% following a poor debate performance by President Biden. This mirrors the trend seen in fan tokens, which often see excessive sales after their teams are knocked out of championships.
What Is the Future for PolitFi?
Trump-themed tokens are not faring any better. The TRUMP token fell by 10% daily and 34% weekly, while the Boden alternative, TREMP, saw a 10% daily and 37% weekly decline. Speculations about Biden potentially withdrawing from the race have led to an 11% contraction in the PolitFi category, according to research analyst Austin Freimuth from Messari.
Key Inferences for Investors
Freimuth’s insights offer valuable takeaways for investors:
- Monitor debate performances as they significantly impact token values.
- Trump’s Vice Presidential pick could trigger new token interest.
- The broader cryptocurrency market trends also influence PolitFi token performance.
Freimuth notes that contrary to expectations, top PolitFi memecoins haven’t surged post-debate. He suggests that Trump’s Vice President pick could ignite interest in new memecoins. Additionally, a decline in Bitcoin prices may have exacerbated the losses seen in PolitFi tokens over the past week, with many altcoins also experiencing drops exceeding 4%.
As November approaches, the PolitFi sector appears volatile, and further developments are crucial to watch for market participants.