New research suggests that at least two memecoins — cryptocurrencies with no intrinsic value based on internet jokes — could provide some insight into US politics.
Prices of TRUMP and MELANIA, memecoins launched by President Donald Trump on the eve of his January inauguration, have a positive correlation with his approval rating, according to a short paper co-authored by a high school student in Connecticut and professors at Yale University and the University of Florida.
Both memecoins were launched days ahead of Trump taking office in January.
“The behaviour of these tokens correlates positively with presidential approval ratings, whereas the same tight coupling does not extend to other cryptoassets and administrations,” they wrote.
“Confirming this hypothesis would imply that political capital is not only measured by polls but also by the activity and prices of PoliFi assets.”
The researchers tracked changes in Trump’s approval rating across several major events during his second term in office: Tariff announcements in February, April and October; Trump’s dinner for investors who purchased his memecoin; Elon Musk’s departure from his role atop the federal cost-cutting team, DOGE; passage of the Genius Act; and the memorial for murdered conservative activist Charlie Kirk.
They found a positive correlation between Trump’s approval ratings and the TRUMP and MELANIA memecoins.
But they found a negative correlation when looking at other cryptocurrencies, such as Bitcoin and Ether.
They speculated that the negative correlation was due to two competing tendencies: presidents’ approval ratings declining over time and assets appreciating over time.
“The behaviour of $TRUMP and $MELANIA correlates with ratings to a larger extent than other tokens,” they wrote.
But they also found that returns on the Trump-linked memecoins don’t necessarily track the president’s approval ratings.
“That is because a positive correlation with prices does not imply a correlation with price increases, but rather with a high price level,” the researchers wrote.
“That is, while returns may be negative, as long as the price level remains relatively high, a positive correlation with prices is possible.”
The authors cautioned that the results were preliminary due to the short timeframe.
The TRUMP and MELANIA tokens had only been in circulation for about 10 months at the time of their analysis.
