February 7, 2024 at 11:08 GMTModified date: February 7, 2024 at 11:08 GMT
February 7, 2024 at 11:08 GMT

Mechanism Capital’s bet on TRUMP meme coin sends it rocketing

The investment firm announced that the TRUMP meme coin was its first new position in 2024.

Mechanism Capital’s bet on TRUMP meme coin sends it rocketing

Mechanism Capital has announced its bold investment strategy for 2024, with the investment firm focusing on tokens and NFTs that revolve around the polarising figure of Donald Trump.

In the past 24 hours, several Donald Trump-themed tokens across networks like Ethereum and Solana have seen their value skyrocket by as much as 100%, a surge attributed to Mechanism Capital’s public endorsement as its first investment choices for the year.

Among these, the $MAGA crypto, trading under the ticker $TRUMP, has seen a successful start to the year, aligning with the former presidents triumphant wins in primaries. 

After news that the investment bank is also backing the tokens, TRUMP is currently up 53% in the past 24-hours.

Mechanism Capital bets on Trump cryptocurrencies

Andrew Kang, the founder of Mechanism Capital, took to social media platform X to share insights into the firm’s investment strategy.

Kang said: “Mechanism Capital has accumulated its first new positions of 2024. These new positions centre around Trump and include Trump related meme coins and NFTs. Prolific usage of Trump sticker packs to start immediately.”

This strategy, according to Kang, is not merely a wager on Trump’s potential presidential victory but a broader bet on the attention and news cycles surrounding him in the lead-up to the U.S. Presidential elections.

“His whole strategy is being provocative, saying outrageous and funny things, things that get the people going,” Kang added.

Mechanism Capital’s focus is particularly on a TRUMP meme coin promoted by MAGAmemecoin. An analysis suggests that a crypto wallet possibly linked to Trump holds over $1 million in TRUMP tokens. This position was built up from an initial allocation worth $7,100 received from the coin’s developers, highlighting the speculative nature of this investment.

 “There’s risks with all shitcoins, but it should also be pointed out that the main risk here is that Trump himself dumps all his $TRUMP (currently valued at ~$1m) and disavows the coin,” Kang said.

“That could either kill it immediately or it could go the path of $DOGE/$SHIB, the former of which had its founder dump all tokens/disavow and the latter of which Vitalik sold down. Both, however, found staying power in spite of those events.”

But the hype is not only attached to that single MAGA token. According to CoinMarketCap, several other Trump inspired meme coins have rocketed in value after Mechanism Capital’s announcement. 

MAGA coin’s price history

The MAGA meme coin has seen its value surge a couple of times already this year. The token spiked following Trump’s comments against the creation of a central bank digital currency (CBDC) during a campaign event, echoing a broader sentiment within the crypto community about the potential overreach and privacy concerns associated with government-controlled digital currencies. 

Another boost came after Trump’s victory in the New Hampshire Republican presidential primary, further cementing the token’s status as a speculative asset tied to Trump’s political fortunes.

At the time of writing, TRUMP was trading hands for $2.45. It had gained 62% over the past week and over 1000% in the previous month.