Memecoins
Is the “Meme Coin Super Cycle” over? The trader outlines the pros and cons
Very popular cryptocurrency trader Altcoin Sherpa provided a detailed analysis that “Meme coin supercycle” is still ongoing or if meme coins have passed their peak.
What happened: Sherpa reflected on the historical performance of similar meme coins Dogemoneta DOGE/USD, which has experienced dramatic cycles of rapid gains followed by sharp retracements. He contrasted the arguments for and against the continuation of meme coin trading.
Prefer meme coins:
Sherpa said people are tired of VC-backed projects with inflated valuations, preferring a higher float and fairer distribution of meme coins.
Their speculative nature makes them more interesting than tech coins. “If you’re looking for truly life-changing gains… buy Bitcoin BTC/USD or even a midcap like Avalanche AVAX/USD probably won’t make you very rich,” says Sherpa.
Finally, the accessibility of meme coins makes them attractive to retail investors. “Why ask someone to understand modular blockchains or chain abstraction when you can just buy a picture of a dog in a hat?” Sherpa asks rhetorically.
Risks of Meme Coins:
The biggest drawback, according to Sherpa, is that meme coins are full of scams and scams, making them risky for the average user. He also added that meme coins may still have insiders controlling large portions of the supply, which can dilute earnings for regular investors.
Meme coins can also lead to rapid financial losses, leaving little hope of recovery. Unlike traditional tokens, meme coins often experience rapid capitulation.
Predatory games and meme coin fatigue are the other two disadvantages noted by the trader. He added that projects like Pumpfun quickly exacerbate the flow of money from retail investors to insiders, damaging the ecosystem.
He warns that there is a possibility that investors will shift focus to coins that offer “real value” as meme coin fatigue grows. “Memes may not be in the super cycle because people are losing too fast, memes are full of insiders, and regular investors are tired/ready for regular coins.”
Because matter: Altcoin Sherpa believes the meme coin sector will remain robust, recommending some exposure to a few meme coins in a diversified portfolio. Note that experienced traders often use a barbell strategy, focusing on major assets like Bitcoin and Ethereum and also investing in meme coins for high returns.
Other traders have highlighted that a wallet with Bitcoin barbell and meme coins have performed best in this bull market.
For investors seeking life-changing gains, meme coins offer potential but carry significant risks. Therefore, Sherpa concludes, “the real value is found in the trenches.”
He suggests that if you are a whale, you can get “the easy 2x to 5x returns on Dogecoin” and grow. He adds, “If you want to work more with midcaps, go for the others like Pepper PEPPER/USD/Dogwifhat WIF/USD/Good BONK. The darker ones are found on Base, Solana, or other random ecosystems.
What’s next: The influence of Bitcoin as an institutional asset class it is expected to be explored in depth at Benzinga’s next event The future of digital assets event on November 19th.
Read next: Struggling meme coins signal the need for a change in the cryptocurrency market
This content was partially produced with the help of artificial intelligence tools and was reviewed and published by Benzinga editors.
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