Lately, the hype around meme coins has taken over the crypto social media scene as various seemingly valueless tokens saw significant pumps over the weekend.
An industry observer mentioned on April 1 that the trend of meme coins is predominantly driven by retail investors. They highlighted that the surge in meme coin popularity indicates the presence of retail activity signaling a bull market.
These types of coins had a market value of only 2 billion dollars in all of 2023. However, they are now quickly skyrocketing to nine-figure market caps.
However, not everyone is convinced. Some believe that while retail investors are participating, they are more interested in the speculative nature and gambling aspect of crypto rather than its technology or financial revolution.
Differing Opinions
Ethereum educator Anthony Sassano, who has been in the crypto space for a decade, expressed his opinion that the current bull market in crypto is the most peculiar one he has witnessed. He emphasized that the typical four-year cycle seems to be obsolete and fundamental-based trading strategies are not as effective.
Sassano believes that retail participation in the market would be truly meaningful when the entire market moves upward together, rather than specific pumps in isolated sectors. He also pointed out that the current meme coin frenzy is predominantly driven by crypto enthusiasts.
Additionally, it was noted that most retail trading occurs on centralized exchanges, which have not experienced significant trading volumes. Furthermore, many of these meme coins can only be traded on decentralized exchanges, a domain less frequented by the average retail trader.
Surge in Meme Coin Market Capitalization
Arthur Hayes, the co-founder of BitMEX, argued in a recent interview that meme coins should not be hastily dismissed as valueless. He suggested that if these tokens bring attention and attract more developers to the ecosystem, they hold positive value for the blockchain sector.
As per CoinGecko, the collective market capitalization of meme coins has surpassed $70 billion, with a daily trading volume of over $7 billion. Tokens like dogwifhat (WIF) have seen an extraordinary surge, reaching a market cap of $4.4 billion, surpassing the likes of Arbitrum, Immutable, and Cronos.
Notably, Dogecoin’s market cap is nearly triple that of Chainlink, while Shiba Inu’s market cap exceeds that of Polygon, indicating a shift away from traditional crypto narratives focused on utility and fundamentals in the current market scenario.
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