The memecoin craze is once again taking over the crypto market!
Memecoins, which dominated the March cryptocurrency surge, seem to be making a comeback thanks to the market's latest frenzy, which was stoked by hopes for Ethereum Spot ETF approval. These online meme-inspired coins have seen explosive growth, surpassing even the most popular cryptocurrencies.
With all eyes on the possible adoption of an Ethereum ETF, speculators rushed to memecoins hoping to make quick cash. The two leaders in this category, Dogecoin (DOGE) and Shiba Inu (SHIB), have experienced a sharp increase in both trading volume and market value.
The true star of the month, though, is Pepecoin (PEPE), a relatively new cryptocurrency that has surged to the 21st position in terms of market value. PEPE, a cryptocurrency based on a webcomic character, has increased in value by over 100% since the beginning of March, setting a new record high. In the process, it even momentarily overtook DOGE and SHIB in terms of trading volume during a 24-hour period.
During market downturns, memecoins are frequently employed as a safe haven or gambling asset by investors dissatisfied with an excessively stable market with little fluctuations.
The Solana ecosystem has also experienced this tendency, as evidenced by the six-fold increase in value of the Floki token (FLOKI) since January. For these memecoins, trading volumes and the count of active addresses have skyrocketed, indicating significant involvement from both whales and small investors.
There are concerns raised by this craze for tokens that have no inherent worth. Memecoins are susceptible to sharp corrections since they rely on the hysteria and mimicking actions of investors. Additionally, money from more important and fundamentally solid crypto projects may be diverted by their explosive ascent.
Memecoins, however, draw attention to the social and emotional aspect of cryptocurrencies. What makes them successful is word-of-mouth and online humour, not technology or use cases. A challenge to reconcile reasoning with the methods of classical basic analysis.
What is the extent of the memecoin rally? Although it's hard to say for sure, investors would be well to proceed cautiously. The short-lived triumphs and breathtaking collapses that characterise the history of cryptocurrencies. We should be cautious of the irrationality that goes along with the meme cult, even while it undoubtedly invigorates the market.