Memecoins are “one of the most powerful narratives” in the cryptocurrency market – CEO

Remember Doge? The Shiba Inu puppy that became a digital currency sensation in 2013? Back then, it was a playful jab at the seriousness of the cryptocurrency world. Fast forward a decade and memecoins, those tokens inspired by internet pranks, are a crazy force in the cryptocurrency economy, amassing a market capitalization by nearly $60 billion, according to Galaxy Digital CEO Mike Novogratz.

This growth is attributed to the growing popularity of Internet memes and their ability to tap into the humor and creativity of the online community. The above figure represents a significant amount, especially when compared to traditional market capitalizations cryptocurrencies like Bitcoin and Ethereum. Indeed, nemecoins, as Novogratz would say, are “one of the most powerful narratives” in the cryptocurrency market right now.

From fun to luck: investing in the LOL factor

“My son-in-law made a fortune,” Novogratz said recently, highlighting the potential for big profits in these playful pups. But how do you value a digital currency based on a meme? Novogratz suggests it’s all about the “laugh factor.” He pointed to dogwifhat (WIF), a Solana-based meme coin inspired by a misspelling of “dog” that has reached a market capitalization of $3 billion.

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Evolving ecosystem: Memecoin means business

This investment strategy might seem like a gamble in a casino, but there is a growing trend of memecoins evolving beyond LOLz. Take Shiba Inu (SHIB) for example. Initially a parody of Dogecoin, SHIB has grown into a project with real-world applications. It now boasts its own payment system, a decentralized naming service (think crypto domain names!), and even a layer 2 scaling solution called Shibarium.

DOGE market cap currently at $20.6 billion. Chart: TradingView.com

This shift towards utility is not unique to SHIB. Floki Inu (FLOKI) launched TokenFi last year, a platform that aims to grab a slice of the tokenization market (think representing real-world assets like properties on the blockchain). This trend suggests that meme coins may be here to stay, potentially becoming more than just a flash in the pan.

A cautionary tale

While Novogratz is optimistic, others remain skeptical. Meme coins are known for sharp price swings, making them a risky investment. Their long-term sustainability based solely on utility remains questionable. Some argue that meme coins are a distraction, drawing attention away from the true potential of cryptocurrencies: promoting innovation and decentralization.

Featured image from Coins.ph, chart from TradingView

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