Is the rising market cap of meme coins a sign of bigger things to come?

Will the surge in meme coins continue? Opinions are divided on whether this trend will last or if it is simply a bubble ready to burst.

Meme Coins are once again in the spotlight. During the last 30 days, the market capitalization of meme coins surged over 36%, leaving many traditional altcoins and even Bitcoin (BTC) in the dust. Since June 3, the market capitalization amounts to an impressive $63.5 billion.

Seven of the top 100 cryptocurrencies by market cap are meme coins. Dogecoin (DOGE), the largest coin by market capitalization, saw a 22% gain, trading at $0.1614. Not far behind is Shiba Inu (SHIB), up 10% and trading at $0.00002598.

However, the real stars of this rally are Pepecoin (PEPE) and FLOKI (FLOKI). PEPE has soared over 100% in just 30 days, now trading at $0.0000153. FLOKI is not far behind, with a 64% increase, trading at $0.0002683.

The excitement doesn’t stop there. A whale recently grabbed 90 million DOGE, worth $14.28 million, from Robinhood.

Additionally, Whale Alert, an on-chain transaction tracking platform, reported a massive movement of 499.42 million DOGE, worth approximately $81.10 million, between two unknown wallets.

So what’s driving this rise in meme coins? Why do they outperform many other cryptocurrencies? Let’s understand what’s fueling this hype and where it could go from here.

New entrants are making noise

As meme coins continue to rally, Solana (GROUND) Even coins based on currencies are having their own spectacular run. Over the past 90 days, the dogwifhat meme coin based on Solana (Wireless) has soared over 134%, now trading at $3.39.

But this is only the beginning. A new player, Book of Meme (BOMÉ), has climbed into the top 100 cryptocurrencies, with a staggering gain of over 1,385% in the last 90 days, currently trading at $0.01354.

The rise of Solana-based meme coins is not happening in isolation. Celebrity tokens recently debuted on Solana, adding to the buzz around meme coins.

Last week, Caitlyn Jenner spear a coin called JENNER via the SOL-based meme coin portal pomp.fun. However, the launch was marred by controversy.

Shortly after trading began, developers abandoned the token, causing its price to plummet and leading to accusations against Jenner of orchestrating a rug pull.

Reports later revealed that a notorious conman named Sahil was behind the incident. Sahil allegedly took advantage of Jenner’s lack of knowledge in the web3 space, using his role as a middleman to profit from the celebrity coin.

Less than 48 hours later, Australian rapper and OnlyFans model Iggy Azalea launched a token under the ticker MOTHER. According to DEX Screener, Azalea’s famous crypto surged over 30,000%, reaching a market cap of $30 million.

But the drama didn’t stop there. Sahil also launched an IGGY coin, trying to capitalize on the Azalea hype and make millions in another pump and dump scheme.

In response, Azalea distanced herself from Sahil’s IGGY piece. She used X Spaces to promote her own token and expressed enthusiasm for the decentralized meme ecosystem.

“It’s a bet, it’s a game. That’s why it’s fun. Play the game or don’t play it. It’s your decision,” Azalea said in an online chat.

Why do meme pieces come together?

There are several factors driving the meme corner rally, and it’s not just about fun and memes. One of the main reasons is positive news from regulators.

The Securities and Exchange Commission (SECOND) recently approved eight Ether spot exchange-traded funds (AND F) with large companies. Although Ether itself has only seen a modest increase, this regulatory green light has sparked optimism in the crypto market, particularly among the riskier and higher-reward meme coins.

Historically, pro-crypto news tends to generate enthusiasm and money flows into the ecosystem, which trickles down to smaller projects. Meme coins, with their relatively small market capitalizations, often experience wild swings during these bullish periods.

However, it’s not just about one-off events like ETF approvals. The recent hype around Solana has carved out a niche for itself as the go-to channel for “speculative fun,” attracting traders willing to bet on meme coins.

It should be noted that the location ETH ETF approvals are still in their early stages. The SEC approved the initial Forms 19b-4, allowing the securities to be listed on an exchange.

However, the final S-1 filings, which detail the structure and management of the ETFs, have not yet been approved. Once these are given the green light, we could see even more market activity and potential price movements.

The community and experts weigh in: will the meme coin rally continue?

As the meme coin rally continues to capture attention, opinions are divided as to whether this trend will last or if it is simply a bubble waiting to burst.

On Twitter (X), a crypto analyst spoke about the importance of current price levels for major coins like FLOKI and DOGE. According to him, these coins are at their uptrend support, a crucial level that could determine the next move.

If they bounce off this support, we could see a broader rally in meme coins. However, if they lose support, a deeper correction could ensue, affecting the entire meme coin market.

Another user expressed concerns about the flow of capital into meme coins and celebrity tokens. He pointed out that many good projects are suffering as investors pour money into these high-risk assets.

However, he views this as a temporary phase, predicting that once the inevitable corrections (or “mats”) occur, capital will return to quality projects.

A prominent figure from Andreessen Horowitz (a16z), Eddy Lazzarin, also provided a critical perspective. He compared the meme coin ecosystem to a risky casino, suggesting that it presents the crypto industry in a negative light.

“At best, it looks like a risky casino. Or a series of false promises masking a casino,” Lazzarin said, warning that this perception could hinder adoption, regulation and innovation in the industry.

Ethereum co-founder Vitalik Buterin also weighed in: criticize the recent wave of meme pieces, especially those with questionable themes or associations.

Buterin expressed his lack of enthusiasm for plays that initially promise excitement but then lead to disappointments and losses.

Meanwhile, Binance reported an explosion in the number of new tokens, particularly on the Solana network. Since April, more than a million new tokens have been created, including more than 640,000 on Solana alone, mostly meme coins.

The various opinions and data suggest that although meme coins are seeing a remarkable rebound, the sustainability of this trend is questionable. It is therefore essential that you exercise caution, keeping an eye on market trends and inherent risks. Never invest more than you can afford to lose.

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