Memecoins
Meme Coins State of Cement Asset Class Amid Founder Cash Grabs
The current cryptocurrency market cycle, which is undergoing a sharp pullback, has been largely driven by meme coin mania and hype around spot Bitcoin ETFs.
On May 1, economist and trader Alex Krüger shared his thoughts on what has been a rather bizarre cryptocurrency market cycle.
Meme coins have dominated the narrative, along with bitcoin following the ETF’s launch, he noted.
However, most of them have now been dumped or gone to zero and meme coin scams were widespread in the market Solana and basic networks.
However, large-cap meme coins “rank among the strongest performers of the year, still showing significant returns despite the correction,” he said before adding.
“Meme coins have established themselves as a viable asset class in their own right.”
Some thoughts on the current crypto cycle
#1 The cryptocurrency cycle has been almost entirely driven by the bitcoin ETF.
#2 ETH was a big disappointment, but overall it worked well for stakers and airdrop farmers.
#3 Solana has established itself as the favorite chain for…
— Alex Kruger (@krugermacro) May 1, 2024
Coin Madness Meme
According to CoinGecko, the total market capitalization of all meme coins is around $46 billion, which is more than Ripple (XRP) and Cardano (ADA) combined. They represent approximately 2% of the total cryptocurrency market.
However, there is a dark side to this madness as the market “started to be flooded with both scam meme coin launches and money-grabbing founders around February,” Krüger noted.
“These founders focus on making a quick buck and generating short-term hype rather than longevity.”
They have also spurred a divide within the crypto community: some believe they bring value to the ecosystem while the opposing view is that meme coins undermine the ideals and purpose of cryptocurrencies.
The trader also said that “almost no new retail has entered the cryptocurrency space.” It was predominantly ETF buyers and “participants in the previous cycle redistribute and exit the risk curve.”
Collapse of feeling
Cryptocurrency market sentiment has collapsed, with Bitcoin correcting yesterday by hitting 23% in a drop below $57,000.
However, this retreat was expected. It has happened many times in the past and it could very well end up to 30%. Fellow trader Bob Loukas saw the irony.
Logged in again to check sentiment. Well.
The last 9 months of Maxi. “Brother ETFs, we will never see a pullback. Just up.
Maxi’s today – “30% pullbacks in a bull market are normal.”
It never gets old.
Expect more weakness from May 16th to May 20th.
— Bob Loukas 🗽 (@BobLoukas) May 1, 2024
Bitcoin Investor ‘CRG’ She said nothing has changed on a macro or fundamental level, adding:
“IMO, BTC isn’t done yet and will break $100,000 much sooner than people expect. That’s when the real altcoin gains will be realized.”
When that happens, for better or worse, meme coins are likely to go on a rampage again.
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