Memecoins
Memecoins overtake Bitcoin: is the spotlight shifting?
- Memecoins have been the talk of the town during this bull run and have performed well since late February.
- There is a fascination with these tokens that solve nothing but still attract thousands of investors.
Memecoin have captured the public’s imagination and attention during this bull run, at least so far. Cryptographic analyst Joao Wedson he underlined this recently in a posted on X (formerly Twitter).
In terms of percentage change in price, memecoins have recently had the upper hand.
Does this mean memecoins are taking the spotlight away from Bitcoin? Will public attention and capital inflows into meme markets have a significant impact on demand for Bitcoin?
Most memecoins are here one moment and gone the next
The recent trend of skyrocketing memecoins in the Solana ecosystem is a good example of how easy it is to create tokens and get a small portion of the public’s attention, even if for a brief moment.
Source: Joao Wedson on X
However, from a market capitalization perspective, memecoins represent a small fraction of the size of Bitcoin. Since the May 1 drop, Bitcoin has added $233 billion to its market capitalization.
In comparison, at the time of writing, the total combined market capitalization of the top ten memecoins stood at $57.26 billion.
Source: Most Holy
The chart above shows that Bitcoin’s social volume (cyan) was 3135 on May 26 compared to PEPE’s 350 (yellow).
This is just one memecoin, not the entire industry, but the difference is still huge considering PEPE gained 75% last week and is one of the most talked about memes online.
Therefore, social media engagement was still in favor of Bitcoin. Additionally, Bitcoin’s derivatives and spot market are likely too large for memecoins to be significantly chipped away at.
The charm of memecoins
The number of cryptocurrencies on the market has increased dramatically year after year. In January 2021, there were approximately 4,154 tokens on the market. In March 2024 that number increased to 13,217 and continues to grow.
Most of these tokens are based on vaporware, products promised to the public but never actually created. This huge dilution among altcoins is very different from the previous two cycles.
OG cryptocurrency traders talk about tokens popping up randomly during a bull run and making triple-digit percentage gains in a matter of days.
The problem now is that with so many tokens in circulation having experienced at least one bear market, the crypto space is too saturated to see them all trending higher during a bull run.
In this regard, memecoins are upfront and honest about their intentions. They bring a community together through jokes and vibes, promise no product expects a potential return on investment, and a little fun along the journey to these earnings.
Win or lose as a bag team.
Light Pepe’s [PEPE] Price forecast 2024-25
People who don’t have the time or know-how to clear dozens, or even hundreds, of crypto tokens are naturally attracted to these concrete meme tokens and willing to bet at least a small sum on them.
This is not to say that there aren’t tokens with good development teams trying to solve a defined problem, but they are harder for the public to find. Perhaps this is why memecoins are outperforming other sectors so far.