Memecoins
Is the “Meme Coin super cycle” over? The trader presents the advantages and disadvantages
Highly followed crypto trader Sherpa Altcoin provided a detailed analysis on whether the “super coin cycle» is still in progress or if the meme pieces are past their peak.
What happened: Sherpa reflected on the historical performance of meme coins like Dogecoin DOGE/USD, which has seen dramatic cycles of rapid gains followed by strong retracements. He compared the arguments for and against continued coin trading.
Favor Coins Meme:
Sherpa said people are tired of venture capital-backed projects with inflated valuations, preferring meme coins’ higher float and fairer distribution.
Their speculative nature makes them more interesting than tech coins. “If you’re looking for truly life-changing gains…buy Bitcoin BTC/USD or even a midcap like avalanche AVAX/USD probably won’t make you very rich,” says Sherpa.
Finally, the accessibility of the coins itself makes them attractive to retail investors. “Why ask someone to understand modular blockchains or chain abstraction when you can just buy a picture of a dog in a hat?” Sherpa asks rhetorically.
Risks of Meme Coins:
The biggest downside, according to Sherpa, is that meme coins are full of scams and rug pulls, making them risky for the average user. He also added that meme coins can still have insiders who control a large portion of the supply, which can dilute the gains of regular investors.
Meme coins can also lead to rapid financial losses, leaving little hope of recovery. Unlike traditional tokens, meme coins often undergo rapid capitulation.
Predatory gaming and coin fatigue are the other two drawbacks noted by the trader. He added that projects like Pumpfun quickly exacerbate the flow of money from retail investors to insiders, thereby harming the ecosystem.
He warns that it is possible that investors will turn to coins offering “real value” as fatigue with meme coins increases. “Memes may not be in the super cycle because people are losing too quickly, memes are filled with insiders, and regular investors are tired/ready for regular coins.”
Why is this important: Altcoin Sherpa believes the meme coin sector will remain robust, recommending some exposure to certain meme coins in a diversified portfolio. He notes that savvy traders often employ a barbell strategy, focusing on major assets like Bitcoin and Ethereum, while also investing in meme coins for high returns.
Other traders pointed out that a bitcoin and meme coin dumbbell wallet have performed the best in this bull market.
For investors looking for life-changing gains, meme coins offer potential but carry significant risks. So, Sherpa concludes, “the real value is found in the trenches.”
He suggests that if you are a whale, you can get “the easy 2x to 5x returns on Dogecoin” and increase your size. He adds: “If you want to work more with midcaps, opt for others like Pepe PEPE/USD/dog hat WIF/USD/Bonk GOOD. The more obscure ones can be found on Base, Solana, or other random ecosystems.
And after: The influence of Bitcoin as an institutional asset class should be explored in depth in the next The future of digital assets event on November 19.
Read next: Struggling Meme Coins Signal Need for Change in Crypto Market
This content was partially produced using AI tools and was reviewed and published by Benzinga editors.
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