Is the meme coin market cap surge a sign of bigger things to come?
Will the surge in meme coins continue? Opinions are divided on whether this trend will last or if it’s just a bubble waiting to burst.
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Meme coins are back in the spotlight. In the past 30 days, the meme coin market cap has surged by over 36%, leaving many traditional altcoins and even Bitcoin (BTC) in the dust. As of June 3, the market cap stands at an impressive $63.5 billion.
Seven of the top 100 cryptocurrencies by market cap are meme coins. Dogecoin (DOGE), the largest meme coin by market cap, has seen a 22% gain, trading at $0.1614. Not far behind is Shiba Inu (SHIB), up by 10% and trading at $0.00002598.
However, the real stars of this rally are Pepecoin (PEPE) and FLOKI (FLOKI). PEPE has skyrocketed by over 100% in just 30 days, now trading at $0.0000153. FLOKI isn’t far behind, with a 64% increase, trading at $0.0002683.
The excitement doesn’t stop there. A whale, recently scooped up 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’s driving this surge in meme coins? Why are they outperforming many other cryptocurrencies? Let’s understand what’s fueling this hype and where it might go from here.
New entrants making the noise
As meme coins continue to rally, Solana (SOL) -based meme coins are having their own spectacular run. Over the past 90 days, Solana-based meme coin dogwifhat (WIF) has soared by over 134%, now trading at $3.39.
But that’s just the beginning. A new player, Book of Meme (BOME), has rocketed into the top 100 cryptos, with a jaw-dropping gain of over 1,385% in the last 90 days, currently trading at $0.01354.
The surge in Solana-based meme coins isn’t happening in isolation. Celebrity tokens have recently made their debut on Solana, adding to the buzz around meme coins.
Just last week, Caitlyn Jenner launched a coin called JENNER via the SOL-based meme coin portal pump.fun. However, the launch was marred by controversy.
Soon after trading began, developers dumped the token, causing its price to crash 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 took advantage of Jenner’s lack of knowledge about the web3 space, using his role 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 didn’t stop there. Sahil also launched an IGGY coin, trying to capitalize on Azalea’s hype 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 excitement for the decentralized meme ecosystem.
“This is a gamble, this is a game. That’s why it’s fun. Play the game, or don’t play it. That’s your decision,” Azalea said during an online discussion.
Why meme coins are rallying
Several factors are driving the meme coin rally, and it’s not just about the fun and memes. One key reason 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 bump, this regulatory green light has sparked optimism across the crypto market, especially among the 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 witness wild swings during these bullish periods.
However, it’s not just about one-off events like the ETF approvals. The recent hype around Solana has carved out a niche for itself as the go-to chain for ‘speculative fun,’ attracting traders willing to gamble on meme coins.
It’s 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 detail the structure and management of the ETFs, are yet to be approved. Once these are green-lit, we could see even more market activity and potential price movements.
Community and experts weigh in: meme coin rally to continue?
As the meme coin rally continues to capture attention, opinions are divided on whether this trend will last or if it’s just a bubble waiting to burst.
On Twitter (X), a crypto analyst talked about the importance of current price levels for major meme coins like FLOKI and DOGE. According to him, these coins are sitting at their uptrend support, a crucial level that could determine the next move.
If they bounce off this support, we might see a broader rally in meme coins. However, if they lose support, a deeper correction could follow, affecting the entire meme coin market.
Another user expressed concerns about the capital flow into meme coins and celebrity tokens. He pointed out that many good projects are suffering as investors pour money into these high-risk assets.
However, he sees this as a temporary phase, predicting that once the inevitable corrections (or “rugs”) happen, capital will rotate back into quality projects.
A prominent figure from Andreessen Horowitz (a16z), Eddy Lazzarin, also provided a critical perspective. He compared the meme coin ecosystem to a risky casino, suggesting that it presents the crypto industry in a negative light.
“At best, it looks like a risky casino. Or a series of false promises masking a casino,” Lazzarin said, warning that this perception could hinder adoption, regulation, and innovation in the industry.
Ethereum co-founder Vitalik Buterin also chimed in, criticizing the recent surge of meme coins, especially those with dubious themes or associations.
Buterin expressed his lack of enthusiasm for coins that promise excitement initially but lead to disappointment and losses later.
Meanwhile, Binance reported an explosion in the number of new tokens, especially on the Solana network. Since April, over one million new tokens have been created, with more than 640,000 on Solana alone, mainly meme coins.
The diverse opinions and data points suggest that while meme coins are enjoying a remarkable rally, the sustainability of this trend is questionable. Hence, it’s crucial for you to tread carefully, keeping an eye on market trends and the inherent risks involved. Never invest more than you can afford to lose.
