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Dogecoin surpassed XRP, Ripple’s Cryptocurrency, in market capitalization.
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Meme cryptocurrencies were born as viral jokes but captured the market’s attention.
It may seem surprising and even irrational, especially for more traditional or “serious” investors, but today a digital asset that pays tribute to a viral Internet dog is more valuable than established automotive companies such as Ford, BMW or Toyota.
After Donald Trump’s victory in the United States elections, dogecoin quote (DOGE) soared and is currently the sixth largest asset in the cryptocurrency marketsurpassing other assets considered “serious” such as the USDC stablecoin or XRPthe cryptocurrency issued by the company Ripple.
At the time of publication of this note, meme coin market capitalization exceeds $59 billion.
As CriptoNoticias has reported, several of the cryptocurrencies with the highest weekly rise are memecoins. The list is headed by Peanut the Squirrel (PNUT)which in the last 7 days rose more than 1,000%.
Memecoins lead the weekly price rise. Source: CoinMarketCap.
The surprising or irrational aspect of this issue arises from the fact that it is this type of digital asset. As explained in Criptopedia, the educational section of CriptoNoticias, the cryptocurrency memes They were created as a form of entertainment but over time they began to be marketed like any other digital asset. The striking thing about their success is that they do not solve any problem and are mostly used for financial speculation.
This means that its price can go down or up in a matter of seconds, without any reason to justify these fluctuations.
However, there are some specialists who have studied the behavior of DOGE investors and the rest of the memecoins, who can be useful to understand what is behind the price increases and why they are well received in the cryptocurrency universe. .
Accessible and easy to understand
Alexanderrand Guilhermeresearcher at the firm Paradigma Education, maintains that meme cryptocurrencies are easy to understand and that makes them especially accessible. “It is much more complex to explain how a lending platform operates than to say that a currency is about a dog with a hat or without a hat,” he explains, while adding that there are “a little more subjective aspects” such as the capacity of the lending mechanics. memecoins are meant to replicate culturally, given that their concept is easy to transmit.
Murad Mahmudova memecoin trader, went one step further and argues that one of the reasons for the price increases of memecoins is related to generational issues. As he explains, young people today face a different economic context, in which purchasing property is difficult and access to capital is limited.
Unlike their grandparents, today’s young people are skilled in the domain of social networks. That is what has led to the rise of meme cryptocurrencies. He furthermore says:
“In the attention economy, social media is the only domain where young people dominate culture, attention and social media. So this is, I think, the biggest reason why meme coins are dominating right now.”
Murad Mahmudov, memecoin trader.
Likewise, Mahmudov highlights that these assets are stripping traders of “everything unnecessary” and adds: “We are building assets that are pure community, pure speculation, pure belief, and that are optimized for the era of social networks, because the meme coin communities are producing better ones than tech Altcoin communities are producing.”
As CriptoNoticias has reported, in 2024 platforms such as pump.fun (Solana network) and SunPump (tron network) that They further simplify the creation of this type of digital assets. In this environment, any user can create their coins without prior technical knowledge and sell them within the same platforms.
The interfaces of these new token creation platforms They are intuitive, easy to use and low cost. Its success has also contributed significantly to the growth of memecoins.
According to Dune Analyticssince the launch of pump.fun in February 2024 More than 3 million tokens were generated valued at 1,219,494 solana (SOL)the equivalent of 265 million dollars.
Tokens created on pump.fun since its launch. Source: Dune Analytics.
Growth of casino culture
Bitcoin/” target=”_blank” rel=”noreferrer noopener”>Willy Wooa renowned cryptocurrency trader and analyst, in one of his latest publications on
Although they can offer quick profits, meme currencies are highly speculative due to their extreme volatility and lack of real utility. Currently, its value depends on the collective interest and For this reason, they are prone to abrupt rises and falls..
An example of this is what happens with DOGE and his relationship with Elon Musk, the CEO of Tesla. Every time the businessman flirts with the Japanese breed dog community, its price tends to rise.
In fact, in the last few hours, the price of dogecoin skyrocketed since the president-elect of the United States, Donald Trump, confirmed that in his government he will launch a Department of Government Efficiency (its acronym in English forms the word DOGE). The area will be led by Musk and politician Vivek Ramaswamy.
Since the announcement, the price of the asset has skyrocketed and is currently trading at $0.40391.
DOGE price so far in 2024. Source: TradingView.
In the same vein as Woo, the casino metaphor is also used by the investment firm a16zin a report that explains the growth of meme assets. In this regard, specialists indicate in their thesis that there is a “casino culture”, which consists of launching tokens for trading as a game of chance.
Likewise, he highlights that there is also another aspect that is more interested in the ecosystem as a new platform for innovation. That is why analysts from the firm a16z maintain that they see it possible for memecoin communities to add utilities to projects that make them prosperous, to move from a “casino” culture to a “computer” culture.
“At the end of the day, many of the disruptive innovations we use today started out looking like a toy,” the firm’s report highlights.
Binance“>Growth of memecoins, according to Binance
Binancethe largest cryptocurrency exchange in the world, recently published research detailing what, in their opinion, led these currencies to attract so much interest and capital.
At the same time, it highlights how memes have become a deeply rooted icon in Internet culture since its origins. This phenomenon has found fertile ground both in the digital economy and in the community of cryptocurrency enthusiasts.
For Binance, they have emerged as an attractive option, especially among young people, as Mahmudov explains. It is that for this age group, It is an alternative to the traditional financial system. Additionally, the report highlights:
“The everyday, unsophisticated retail investor can much more quickly understand the principles behind a coin powered by a cute or catchy meme, compared to a technically complex new Layer 2 solution or a DeFi primitive.”
Binance, cryptocurrency exchange.
As Binance notes, “the rise of memecoins is a demonstration of the ability of cryptocurrency networks to unite individuals globally, fostering communities around tokenized assets.”
In that sense, analysts of the exchange They emphasize that if current trends persist, memecoins “may continue to grow in popularity and capture growing interest within the cryptocurrency market.”
Creation of memecoins by year. Source: Binance.
Looking to the future, the great challenge for memecoins is to consolidate a new narrative and promote other technological uses such as, for example, achieve real profits and not limit themselves to being instruments of financial speculation.
Finally, it is worth remembering that they are the riskiest options in the cryptocurrency ecosystem because, as mentioned in this article, they depend largely on the sentiment of social networks, communities and news of the moment, such as the appointment of Elon Musk at the head of a government area.
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