- 97% of memecoins have lost value, showing their speculative nature.
- Crypto exchanges are seen as key players in the memecoin craze.
- Memecoins could evolve into structured communities with real-world utility.
Ki Young Ju, CEO of CryptoQuant, shared his perspective on memecoins, calling them an early form of collective consciousness. As much as he doesn’t enjoy them, he sees a transformational potential in them. Memecoin communities, according to Ju, work in a similar manner to religious communities under a shared doctrine.
Currently, they have a negative connotation, with criticism focused at crypto exchanges. Yet, in his opinion, the coins can, in the long-term, become organized structures with real utility, possibly supporting charities, NGOs, and other noble causes in virtual communities.
Binance Research: 97% of Memecoins Have Failed
A recent report by Binance Research portrays a dire scenario for memecoin viability, with 97% becoming worthless. Memecoins, in a seeming contradiction to backing decentralization and transparency, have a propensity for prioritizing financial speculations over innovation, according to a report.
Despite this, in 2022, their value tripled in terms of market value, and currently, they contribute 11% to the crypto market cap (excluding BTC, ETH, and stablecoins). Nevertheless, it is less compared to 2021 when DOGE and SHIB hit $80B and $39B, respectively.
Rapid Growth, Faster Deaths
Memecoins are popping in and out at a record pace. How long it takes for new coins to gain traction has become shorter—$WIF reached a $1B market cap in 104 days, when $SHIB took 279 days and DOGE took eight years. They’ ease of creation comes at a cost, with them popping out in droves overnight. Most, nevertheless, have a short life, with 97% having near-zero trading volumes. Most, even with a few exceptions, have a short life, sustained through hype in the marketplace and not through real value.
Will Memecoins Evolve or Fade?
The memecoin marketplace is uncertain. DOGE and SHIB have withstood the test of time, but most of them fritter out of existence almost as soon as they arrive. The big question is whether memecoins will develop into organized financial and social instruments or will forever be mere speculative assets. If they can transition out of hype trading and into utility use, then memecoins can become a part of a lasting role in the crypto economy. Otherwise, memecoins will forever be a high-risk gamble with transient utility.
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