Memecoin Mania Cooling Off: Trends Show a Shift in Crypto Attention
Memecoins are a contentious yet important aspect of cryptocurrency. The majority are more like gambling than investment because they are structurally dangerous and have little use. Memecoins continue to be a resilient component of the cryptocurrency attention economy in spite of this.
The total cryptocurrency market was worth $3 trillion in 2021. The value of memecoins increased to $83 billion, or around 2.77% of the entire market. This emphasized their function as very eye-catching components rather than essential resources. But it appears that memes’ “risk-reward” attraction is waning. Today, the market value of memecoin is still close to $80 billion. Nonetheless, the total cryptocurrency market has grown to $4 trillion. This indicates that their market share has actually decreased, coming in at about 2%.
Oversaturation Is Killing Memecoin Value
According to a Galaxy assessment, the primary cause is oversaturation.
Pump.fun changed everything. For the first time, the barrier to entry to launch a memecoin was essentially zero.
Browse Poststhe report
It described how anyone could quickly create a tradable, liquid token using a bonding curve for a few bucks and no prior knowledge of code. Launchpads swiftly took the lead, token production skyrocketed, and the memecoin ecosystem underwent a structural change as a result. To sum up, memecoin value is simply being destroyed by oversupply. Because there are so many tokens flooding the network, the value of each token plummets, and traders shift their money in search of fast flips elsewhere.
The Struggle of Memecoins to Keep Up with Bitcoin
The market as a whole and memecoins are clearly moving in inverse directions. By mid-July, the DOGE/BTC ratio had brutally dropped 53% from its top in Q2 2021, when it was at 0.00001287, right when Bitcoin hit $60k. Dogecoin, on the other hand, surged more than 1,000% to $0.73. When BTC encountered resistance, traders essentially switched to DOGE. However, the DOGE/BTC ratio has since fallen with each annual cycle, indicating that memecoin rotations are becoming less effective in comparison to BTC highs. Memes’ market capitalization is stagnating because they aren’t catching on.
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