In contrast to Bitcoin’s peak price of $73,600 in March 2024, which gained much attention, memecoins have been the most lucrative crypto trend this year with an average return of over 1,300% for their leading tokens.
In recent days, some new memecoins like Book of Meme (BOME), Brett (BRETT), and Cat in a Dogs World (MEW) have unexpectedly gained massive popularity. As a result, they have rapidly moved up the charts to become leading meme projects within just a few weeks. This surge has brought significant returns for many investors, transforming even modest investments into substantial gains.
One investor quickly turned a $13,000 investment into over $2 million by buying MOEW tokens shortly after their DEX listing on April 3. According to sources, this trader bought approximately 499.9 million MOEW tokens with the equivalent of four Ether minutes post-launch. Within an hour, they sold around 111.65 million MOEW tokens for roughly 99 Ether, valued at approximately $328,000 back then.
An instance parallel to this, a trader invested $8,300 in purchasing Apu Apustaja (APU) tokens and amassed a fortune of billions. However, they decided to sell when the token price peaked at $0.0007907, resulting in an investment worth around $6.5 million.
Regarding the eye-watering sums in memecoin markets, CoinGecko analyst Lim Yu Qian said:
“The memecoin narrative was 4.6 times more profitable than the next best-performing crypto narrative of tokenized real-world assets [RWA] and 33.3 times more profitable than the layer-2 narratives with the lowest returns in Q1 this year.”
In March, the number of Google searches for “memecoin” came very close to reaching its all-time high, hitting the second-largest figure on record. Meanwhile, the combined value of memecoins in circulation surpassed $50 billion for the first time around the same period.
Does the rise of memecoins reflect investor sentiment?
According to some market analysts, the surge in popularity of memecoins could be a sign of growing public enthusiasm for decentralized tech and the crypto market as a whole.
Shytoshi Kusama, the anonymous head developer of Shiba Inu (SHIB), the second-largest memecoin, shared with CryptoMoon his belief that soaring valuations signal investors’ readiness for significant shifts, making way for decentralized technologies to take center stage in the digital world’s mainstream. According to him, memes’ true influence lies in their ability to affect reality.
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Kusama emphasized the potential of meme projects like Shiba Inu, pointing to their advanced offerings such as Zama.ai’s homomorphic encryption platform and forthcoming payment technologies, which will demonstrate equal longevity and utility while maintaining decentralization. In simpler terms, he believed that these projects can thrive just as long as more traditional ones, all while staying true to the core principles of blockchain decentralization.
“While crypto, in general, remains highly volatile and speculative, with many projects going to zero, Shib has continued to create identity, security, and technology systems to mitigate existing risks. In this way, as the bull market continues, we will onboard the next billion users safely.”
Indrajeet Roy, a co-founder of TradeX, the cryptocurrency predictions market, shared with CryptoMoon his observation that the surge in popularity of memecoins signifies the significant impact of storytelling and marketing on the rising success of the crypto asset class.
“Meme coins react strongly to public feelings and popular topics. Recently, we’ve seen a significant increase in value, demonstrating how powerful community-driven humor and content can be in generating buzz and price fluctuations. Meme coins serve as an accessible entrance for people new to the crypto market,” he explained.
Is the ongoing craze sustainable?
Certain memcoins offer some level of functionality, yet several of them experience dramatic value drops not long after significant gains, causing doubt about the longevity of their ecosystems.
Roy thinks that because most memcoins don’t have solid foundations or purposes, their fame will endure as long as the present convergence of the internet, social media, and cryptocurrency finance continues to flourish.
“The meme industry’s growth is a sign of how narrative-driven the market is right now. Healthy growth happens when most users evolve to more researched, fundamentally strong projects. But at a market level, it’s still early on in this bull run cycle, so it might not be fair to call this growth unsustainable, though, in a matter of months, that might be the case.”
As the sector becomes more established and projects shift their focus towards providing utilities, there’s a possibility that it may overlap or combine with sectors like GameFi in the future.
“Meme coins have the ability to enhance functionality in various prediction markets, such as a Trump coin for wagering on elections and bringing value through trading,” he explained.
Michael Telera, representing Solana’s meme token Laika (LAIKA), assured CryptoMoon that concerns about the longevity of the memecoin market can be alleviated by observing the substantial investments made by investors during the previous two years.
According to his perspective, the value of these tokens is expected to increase as more people come to appreciate their innovative technological and social benefits, including ease of use, integration in financial systems, and educational potential regarding blockchain technology. Furthermore, memecoins, particularly those experiencing a surge in popularity, have the ability to attract newcomers to the industry through uncomplicated, relatable, and accessible means.
Memecoins could face legal challenges
According to Telera’s perspective, the expanding popularity of memecoins could lead to intricate issues, potential regulations, and limitations. He further mentioned that heightened scrutiny from regulators would make it challenging to launch new initiatives. Consequently, there could be a brief period of inactivity during the upcoming winter months. However, he remained optimistic, predicting a resurgence of growth, or a “summer,” in due course.
The surge in popularity of memecoins is causing some unease about the crypto market’s reliability and professionalism. In a talk with CryptoMoon, a Bitrue representative expressed worry that this unchecked growth could tarnish the reputation of cryptocurrencies, possibly damaging their trustworthiness and the wider acceptance of blockchain technology.
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In addition, the increase in offensive tokens with racist and homophobic slurs in the crypto world over the past few months has sparked debates among community members. Some are urging developers to take action, while advocating for stricter rules and supervision to preserve the industry’s reputation and promote ethical advancements.
In light of the developing trend of memecoins, it’s essential for regulatory bodies and market participants to tread carefully. They must find a way to foster innovation while ensuring investor protection and maintaining the integrity of the cryptocurrency industry.
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2024-04-18 16:14