This is why Donald Trump-themed meme coins have skyrocketed.

Donald Trump-themed altcoins have experienced a meteoric rise, attracting the attention of both crypto enthusiasts and political watchers.

This increase comes as Mechanism Capital, a prominent crypto fund, announced that it will make a strategic investment in Trump-related meme coins, marking the first new positions in 2024.

Donald Trump meme coins steal the spotlight

The crypto market has seen high volatility with several Trump-themed tokens on blockchains such as Ethereum and Solana. In fact, they made up to 124 percent profit in 24 hours. This unprecedented sharpness is largely related to mechanism capital's massive position in such assets.

Mechanism Capital co-founder Andrew Kang explained why. He pointed out that the merger of meme coins and Donald Trump's ability to dominate the news cycle, especially in the US primaries.

Read more: 7 Hot Meme Coins and Altcoins Trending in 2024

Kang stressed that the appeal of Trump-themed meme coins goes beyond election results. It is tied to Trump's continued media presence, fueled by his inflammatory rhetoric and numerous legal battles. These factors create a continuous news cycle that keeps Trump and Trump-centric altcoins in the spotlight.

“This is not just a bet on whether or not Trump will win. The polls show he's more likely to win, but that's not the point. The point is that he's always in the news everywhere and people are constantly talking about Trump. His whole strategy is to say things that are provocative, offensive, and funny. He's saying things that push the crowd,” Kang explained.

Risks in Trading Low Cap Altcoins

DexTools data confirms increasing interest in MAGA's TRUMP token. It boasts a market capitalization of over $117.27 million. A total of $4.84 million worth of trading was recorded in the last 24 hours.

Additionally, a TRUMP-linked crypto wallet holds more than $1.45 million in TRUMP tokens. Initially funded with $7,100 from meme coin developers, this wallet's value has soared, highlighting speculative interest in Trump's political actions.

Read more: 13 Best Altcoins to Invest in February 2024

What's more, TRUMP tokens now represent the lion's share of Donald Trump's crypto holdings, surpassing even major assets like Wrapped Ethereum (WETH) and Ethereum (ETH). This shift reflects the unique appeal of Trump-themed digital assets and reflects a broader trend of political figures influencing market dynamics in the crypto ecosystem.

Kang acknowledged the risks of the investment strategy. The volatility of meme coins and the uncertainty of Trump's support for the TRUMP token have presented significant challenges. Still, Kang remains optimistic, comparing it to other cryptocurrencies such as Dogecoin and Shiba Inu that have endured similar challenges.