Memecoins are important to the blockchain and cryptocurrency community, and Binance Research highlights a unique value proposition.
According to a Binance report, the rise of memecoins is accompanied by an increase in the world’s money supply. As money and capital become more accessible, risky investments like Bitcoin, altcoins, and memecoins become attractive options.
Although memecoins promise strong upside, they are also a high-risk investment as they are highly speculative and have few use cases. However, their recent performance seems to be against the odds—their market share rose 22% immediately after the US election.
Doge and PEPE coins are the top two among coins this Wednesday, adding 15% and 11% to their values, respectively.
Binance Research: 75% Of All Memecoins Were Launched Last Year
According to Binance’s November 2024 survey, meme currencies are growing in popularity because people are now looking at risky investments. The report adds that the global money supply is increasing, and many retail investors are looking for other ways to generate wealth. The market value of this niche has tripled since 2022, due to the popularity of these coins.
Binance’s report also talked about the dishonesty of the regulator of Initial Coin Offerings (ICOs). With this order, developers will now consider funding from private equity firms (VCs) to develop their projects. Experts call this the “Low Float and High FDV” method, which means that only a few tokens are available for trading but boast a high value.
Memecoins Are Always An Affordable Investment Option
While this approach benefits developers and startups, it can put ordinary investors at risk. As such, many retail investors are looking at memes as alternative investment options. These are the main reasons why meme tokens are popular and very accessible to all.
Binance adds that about 75% of all meme currencies were launched last year. The Binance team admitted that many find launching these projects easy, but maintaining their operations is a challenge. According to the same report, about 97% of all memecoins are dead, and the remaining struggle but managed to ride the hype of the election this year.
Memecoins Jump 22% Daily, Thanks to Election Hype
Although these coins are considered community-driven and accessible currencies, they are also highly speculative. Many in the community have placed their bets on a “meme coin supercycle” to coincide with Bitcoin’s run. The bet paid off, and memecoins’ market cap is now over $73 billion, representing a 22% increase.
Featured image from xtsupport.zendesk.com, chart from TradingView
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