Meme coins are currently on the rise as the entire cryptocurrency market experiences a bullish trend. However, Bloomberg highlights that the current level at which meme coins are trading is similar to that of the crypto bubble that burst two years ago, cautioning for a possible correction. The potential burst of this bubble could create shockwaves, similar to what occurred in 2021.
The frenzy surrounding meme coins has raised concerns, with Bloomberg reporting that their trading volumes are currently at levels last seen before the last crypto bubble burst over two years ago. Despite this warning, the meme coin craze in the digital asset market shows no signs of slowing down. Meme coins like Dogwifhat and Pepe are gaining more traction than even Bitcoin, despite their reputation for being speculative and volatile. According to data from blockchain data firm Kaiko, the trading volume for the top meme coins, which often trade for very low prices, reached around $80 billion in the last week, marking the highest level since October 2021.
The year 2021 saw the bursting of the crypto bubble, but currently, meme coins are taking advantage of the positive trend in the cryptocurrency industry and displaying significant growth potential. Bitcoin has reached its all-time high value, boosting positive sentiments among market participants. However, after reaching a record high in 2021, the crypto market experienced a sharp decline.
According to CNBC, the two largest digital currencies lost three-quarters of their value in the year following Bitcoin’s peak of almost $68,000, falling alongside the riskiest tech companies. The industry’s value dropped from over $3 trillion to about $900 billion. By the end of 2021, Ethereum had dropped by over 23% to $3,769.70, and Bitcoin had also dropped by nearly 30% from its peak of $47,686.81.
Investopedia defines “meme coin” as a cryptocurrency name based on people, animals, characters, works of art, or anything else that can be imitated. While some may find these coins amusing, they are also volatile investments. Rivals of Shiba Inu Coin, such as Pepe (PEPE), Floki (FLOKI), Dogfight (WIF), and Grok (GROK), have set their sights on sending their coins “to the moon” by 2024, driven by the growing demand for more affordable investment options.
In conclusion, meme coins have gained popularity due to their lighthearted and enjoyable nature, backed by passionate online merchants and followers. However, they are also considered risky investments. As the cryptocurrency market continues to evolve, it remains to be seen how meme coins will fare in the long run.
