Trump-Themed PoliFi Tokens Buck Bitcoin Downtrend as China Stimulus Hopes Return

• Trump-themed PoliFi tokens outperformed a slow market this week as the Republican candidate pulled ahead of Kamala Harris on Polymarket.
• Crypto traders in Asia are eagerly awaiting Beijing's next moves as the People's Bank of China (PBoC) prepares to role out more stimulus.

Donald Trump-themed Political Finance (PoliFi) tokens bucked low volatility in bitcoin and the broader crypto market this week as the Republican presidential candidate's chances of winning the election surged to a two-month high on Polymarket.

Bitcoin slid over 4% in U.S. hours Thursday, before recovering in Asian morning hours Friday, now trading above $60K, as renewed regulatory fears plagued the market.

A re-acceleration in inflation pressure in September initially sent markets lower, with majors such as ether (ETH) and dogecoin (DOGE) falling as much as 6%.

But Trump-themed MAGA, MAGA HAT, and the Solana-based TREMP are all up double digits this week, with MAGA, the first and largest of them, up 55% on-week with a market cap moving past $200 million, while MAGA HAT is up $102% while TREMP is up 93%.

PoliFi is a cohort of tokens and memecoins that gained traction earlier this year, allowing communities and traders to speculate on the rise or fall of political figures using markets.

Trump's odds of winning the U.S. presidential election have surged to a more than two-month high on the leading prediction market, Polymarket.

As of Friday, traders are giving the former president a 55.8% shot versus Vice President Kamala Harris' 43.8%, according to pricing on Polymarket, where more than $1.6 billion has been wagered on the November election.

However, some market watchers await broader economic data before placing larger bets.

“A rebound in Trump's election odds has failed to elevate sentiment higher, and the market could be focused on how much of the income release of the FTX creditor claims will be reinvested back into crypto,” shared Augustine Fan, head of insights at SOFA, in a Telegram message to CoinDesk.

Elsewhere in crypto, Uniswap's native token (UNI) is up 10% as the market responds positively to the decentralized exchange (DEX) rolling out its own Layer-2 network built on optimism.

Meanwhile, the CoinDesk 20 (CD20), an index tracking the performance of the largest digital assets, has been flat, up only 0.5%.

Renewed China Stimulus Hopes

Traders might wait to see how far the Chinese government goes with stimulus measures before making moves.

Bloomberg reported that market participants in China expect $283 billion (2 trillion yuan) in fresh fiscal stimulus as early as this weekend.

Elsewhere in China, the PBoC has begun to roll out a $70.6 billion fund called the Securities, Funds, and Insurance Companies Swap Facility, Caixin reported, which will allow financial institutions to pledge bonds, ETFs, and specific stock holdings to the PBoC in exchange for liquid assets like government bonds, which they can use to secure additional financing for stock purchases as a form of market stabilization.

However, does any of this matter for crypto investors eager to see BTC hit an all-time high? Maybe not.

A paper from BCA Research suggests that while China’s recent major stimulus has sparked rallies in stocks and risk assets like bitcoin, CoinDesk reported earlier, it may not have lasting effects, as the new credit flow, or "credit impulse," is too low to drive a strong economic boost similar to past cycles like in 2015.