Is the Boom in Meme Coins Set to Continue? Speculation Abounds on the Longevity of this Trend
Table of Contents
Emerging Players Making Waves
Reasons Behind the Meme Coin Surge
Community and Experts Weigh In: Will the Meme Coin Rally Persist?
Meme coins are once again in the spotlight. Over the past month, the meme coin market cap has skyrocketed by more than 36%, surpassing many traditional altcoins and even Bitcoin (BTC). As of June 3, the market cap has reached an impressive $63.5 billion.
Within the top 100 cryptocurrencies by market cap, seven are meme coins. Dogecoin (DOGE), the largest meme coin by market cap, has experienced a 22% increase, currently trading at $0.1614. Following closely is Shiba Inu (SHIB), with a 10% gain and trading at $0.00002598.
However, the real stars of this surge are Pepecoin (PEPE) and FLOKI. PEPE has surged by over 100% in just 30 days, now trading at $0.0000153. FLOKI is not far behind, with a 64% rise and trading at $0.0002683.
The excitement doesn’t end there. A whale recently bought 90 million DOGE, valued at $14.28 million, from Robinhood. Additionally, Whale Alert, an on-chain transaction tracking platform, reported a massive movement of 499.42 million DOGE, worth around $81.10 million, between two unknown wallets.
So, what is fueling this surge in meme coins? Why are they outperforming many other cryptocurrencies? Let’s delve into what is driving this hype and where it could lead.
Emerging Players Making Waves
As meme coins continue their rally, Solana-based meme coins are having their own impressive run. Over the past 90 days, Solana-based meme coin dogwifhat (WIF) has surged by over 134%, now trading at $3.39.
But that’s just the beginning. A newcomer, Book of Meme (BOME), has soared into the top 100 cryptos, with an astonishing gain of over 1,385% in the last 90 days, currently trading at $0.01354.
The surge in Solana-based meme coins is not happening in isolation. Celebrity tokens have recently made their debut on Solana, adding to the buzz surrounding meme coins.
Just last week, Caitlyn Jenner introduced a coin called JENNER via the SOL-based meme coin portal pump.fun. However, the launch faced controversy.
Shortly after trading began, developers dumped the token, causing its price to plummet and leading to accusations against Jenner of orchestrating a rug pull.
Reports later revealed that a notorious scammer named Sahil was behind the incident. Sahil allegedly exploited Jenner’s lack of knowledge about the web3 space, using his position as a middleman to profit from the celebrity’s meme coin.
Less than 48 hours later, Australian rapper and OnlyFans model Iggy Azalea launched a token under the ticker MOTHER. According to DEX Screener, Azalea’s celebrity crypto surged over 30,000%, reaching a $30 million market cap.
But the drama did not end there. Sahil also launched an IGGY coin, attempting to capitalize on Azalea’s popularity and making off with millions in another pump-and-dump scheme.
In response, Azalea distanced herself from Sahil’s IGGY coin. She took to X Spaces to promote her own token and expressed her enthusiasm for the decentralized meme ecosystem.
“Why meme coins are rallying
Several factors are propelling the meme coin surge, and it’s not just about fun and memes. One significant factor is the positive news from regulatory bodies.
The Securities and Exchange Commission (SEC) recently approved eight spot Ether exchange-traded funds (ETFs) from major firms. While Ether itself has only seen a modest increase, this regulatory approval has sparked optimism across the crypto market, especially among riskier, high-reward meme coins.
Historically, pro-crypto news tends to generate excitement and money flow into the ecosystem, which trickles down to smaller projects. Meme coins, with their relatively small market caps, often experience wild swings during these bullish periods.
However, it’s not solely about one-off events like the ETF approvals. The recent hype surrounding Solana has established a niche for itself as the preferred chain for ‘speculative fun,’ attracting traders willing to take risks on meme coins.
It is worth noting that the spot ETH ETF approvals are still in the early stages. The SEC has approved the initial 19b-4 forms, allowing securities to be listed on exchanges.
However, the final S-1 filings, which outline the structure and management of the ETFs, are yet to be approved. Once these are given the green light, we could witness even more market activity and potential price movements.
Community and Experts Weigh In: Will the Meme Coin Rally Persist?
As the meme coin rally continues to grab attention, opinions are split on whether this trend will endure or if it is just a bubble waiting to burst.
On Twitter, a crypto analyst discussed the significance of current price levels for major meme coins like FLOKI and DOGE. According to him, these coins are at their uptrend support, a critical level that could dictate the next move.
If they bounce off this support, a wider rally in meme coins might be seen. However, if they lose support, a deeper correction could follow, impacting the entire meme coin market.
Another user raised concerns about the capital flow into meme coins and celebrity tokens. He highlighted that many solid projects are suffering as investors pour money into these high-risk assets.
Nevertheless, he views this as a temporary phase, foreseeing that once the inevitable corrections (or “rugs”) occur, capital will flow back into quality projects.
A prominent figure from Andreessen Horowitz (a16z), Eddy Lazzarin, also shared a critical perspective. He likened the meme coin ecosystem to a risky casino, suggesting that it portrays the crypto industry negatively.
“At best, it looks like a risky casino. Or a series of false promises masking a casino,” Lazzarin remarked, cautioning that this perception could impede adoption, regulation, and innovation within the industry.
Ethereum co-founder Vitalik Buterin also weighed in, criticizing the recent surge of meme coins, especially those with questionable themes or associations.
Buterin expressed his lack of enthusiasm for coins that offer excitement initially but result in disappointment and losses later on.
Meanwhile, Binance reported a surge in the number of new tokens, particularly on the Solana network. Since April, over one million new tokens have been created, with more than 640,000 on Solana alone, mostly meme coins.
The varied opinions and data points suggest that while meme coins are experiencing a remarkable surge, the sustainability of this trend is uncertain. Therefore, it is essential to proceed with caution, closely monitoring market trends and the inherent risks involved. Never invest more than you can afford to lose.