Memecoins
The meme coin craze is taking over the crypto market again!
Wed May 22, 2024 ▪ 3 min reading ▪ by Fénelon L.
Memecoins, which dominated the crypto rally in March, appear to be making a comeback with recent market enthusiasm fueled by expectations for Ethereum Spot ETF approvals. These tokens, inspired by Internet memes, have seen meteoric gains, eclipsing even major cryptocurrencies.
A rush for Memecoins
While attention was focused on the potential approval of a Ethereum Spot ETF, investors rushed to memecoins in search of quick profits. Dogecoin (DOGE) and Shiba Inu (SHIB), the two standard bearers in this category, have seen their trading volumes and market capitalizations soar spectacularly.
However, the real star of the month is Pepecoin (PEPE), a newcomer that has risen to 21st position among cryptos in terms of market capitalization. Inspired by a webcomic character, PEPE has more than doubled its value since the beginning of March to reach a new record level. Capitalizing on this momentum, it even briefly surpassed DOGE and SHIB in terms of trading volume over a 24-hour period.
This phenomenon also extended to Solana Ecosystem, where the Floki token (FLOKI) has seen its value increase sixfold since January. Trading volumes and the number of active addresses have exploded for these memecoins, indicating strong participation from whales and retail investors.
Records in sight?
This frenzy around tokens without intrinsic value raises questions. Memecoins depend on hype and mimetic behavior of investors, with the risk of sharp corrections. Their meteoric rise could also divert capital from more serious and fundamentally sound crypto projects.
Nevertheless, memecoins highlight the emotional and community dimension of cryptos. More than technology or use cases, it is word of mouth and jokes on the Internet that make them successful. A logic that is difficult to reconcile with traditional fundamental analysis.
How far will the memecoin rally go? It’s difficult to predict with certainty, but investors would do well to exercise caution. The history of cryptos is littered with fleeting successes and dramatic falls. While the cult of memes certainly brings excitement to the market, it is wise to be wary of the irrationality that accompanies it.
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Fenelon L.
Passionate about Bitcoin, I like to explore the intricacies of blockchain and cryptos and I share my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.