- CZ criticizes meme coins, urging a focus on real-world blockchain applications over speculative tokens.
- Meme coin market cap reaches $123 billion, despite concerns over utility and market volatility.
As a seasoned crypto investor with over a decade of experience, I find myself standing at a crossroads between the memecoin mania and CZ’s sage advice. While the allure of quick profits and the thrill of backing a viral sensation are hard to resist, I can’t help but heed CZ’s call for real-world applications.
2024’s memecoin craze has sparked strong disapproval from Binance‘s founder, Changpeng ‘CZ’ Zhao, who recently described the present memecoin environment as “quite unusual.
Zhao recommended that the blockchain community should emphasize creating practical, real-life applications over spending time on hypothetical or speculative token schemes.
CZ took to X and noted,
I don’t have a problem with memes in general, but the concept of meme-based cryptocurrencies is starting to feel a bit unusual. Instead, let’s focus on creating practical applications utilizing blockchain technology.
Interestingly, this event caused a domino effect in the market, leading to increased selling activity for well-known meme cryptocurrencies such as Dogecoin [DOGE], Shiba Inu [SHIB], Pepe [PEPE], and Bonk [BONK], resulting in price drops.
Community reacts to CZ’s memecoin’s criticism
Speaking of which, it’s worth noting that CZ made his remarks about meme cryptocurrencies yesterday, coincidentally following Binance’s launch of trading futures for two fresh meme coins, WHY and CHEEMS, on the BNB network.
Yet, it turned out that the launch timing wasn’t favorable, as both cryptocurrencies experienced a significant decrease in value shortly thereafter.
Remarking on the same, Dan Crypto Larp, a user on the X platform, noted,
As a fellow analyst, I find myself echoing the sentiments of Changpeng Zhao and notable crypto investor Nagato. Both have expressed a need for a significant “clean-up” in the memecoin market. This implies that they believe it’s crucial to eliminate less viable or unproductive memecoins, fostering a healthier and more robust ecosystem for the remaining projects.
I’ve been highlighting the significant difference I see between a handful of meme coins that genuinely provide amusement or entertainment, and the vast majority that seem to serve no real purpose or offer any tangible value.
Nagato said,
100% on board with your thoughts! Some exceptional memes can be downright hilarious and positively uplifting. However, the majority seem odd or low-quality. I’m eagerly anticipating a thorough purge to improve the quality!
The rise of memecoins
Indeed, the trend of meme-based cryptocurrencies, sparked by DOGE, has spread across various blockchain platforms, encompassing Ethereum (ETH) and Solana (SOL) among others.
Platforms like Solana’s Pump Fun and Tron’s Sun Pump are making memecoin creation easier.
As a result, this increase has significantly raised Solana’s transaction volumes, even outperforming Ethereum in certain benchmarks, highlighting the escalating impact of meme coins within the cryptocurrency market.
In fact, a recent CoinWire report reveals troubling statistics about influencer-promoted memecoins, with 76% of them backing tokens that are essentially dead.
Moreover, a significant proportion – about two-thirds – of the meme coins endorsed by influencers often lack lasting potential. In fact, an astonishing 86% of these coins lose as much as 90% of their worth in merely a three-month period.
Only a rare 1% of promoted coins manage to deliver a 10x return.
Nevertheless, even though these statistics are troubling, memecoins continue to garner significant interest within the cryptocurrency community, according to memecoin advocate Ramonos.
People are weary of sifting through countless documents. Instead, they prefer a more engaging approach – like viewing an image – and taking a chance with their funds based on that.
Currently, the total value of all meme coins is approximately $123 billion, showing a minor increase of about 1.8% in the last day, as reported by CoinGecko.
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2024-11-27 18:32