2024-05-07 17:02:03 ET
Meme coins are typically considered more speculative than other altcoins. In the ongoing cycle, meme coins on the Solana and Base chain, top assets by market capitalization like Dogecoin (DOGE), Shiba Inu (SHIB) have yielded massive gains for holders.
Colin Wu, Chinese journalist recently reported that 138 meme coins were registered on Coinmarketcap in April 2024, against 18 in April 2023. The meme coin narrative is 4.6 times more profitable than the next best performing crypto narrative Q1 of 2024, supporting the thesis that meme coins are the secret sauce of traders in the ongoing cycle.
Why meme coins have emerged as the most profitable trade
CoinGecko’s report reviews crypto narratives in the Q1 of 2024 and identifies meme coins as the most profitable narrative of the quarter. With over 1,300% gains, meme coins rank first, closely followed by Real World Assets (RWA).
The meme coin frenzy on the Solana blockchain pushed the market capitalization of the top 10 meme tokens nearly 800% higher in Q1 2024, as seen in the report. WIF, BONK, MEW, POPCAT, BOME, MYRO, SLERF, WEN, BODEN and SAMO rank in the top meme coins on the SOL chain.
Solana meme coin market capitalization in Q1 2024
Laura Shin, host of the Unchained podcast, recently unpacked the investment thesis behind meme coins this cycle, in an episode titled, “Why Memecoins Have Been 2024’s Most Profitable Crypto Trade: Ansem and Kelxyz.” Despite being controversial, the asset class has crossed $50 billion in market capitalization.
Ansem, crypto trader and analyst says that there is value in memes and internet culture. When memes get extremely popular, they derive value from the mind space, and recognition among people. Crypto and meme coins are now “financializing” social media trends. The distribution of meme coins is interesting in itself, as projects airdrop tokens to influencers and entities to gain exposure and attention from market participants.
Meme coins do not typically have inflation, staking or other utilities. A majority of the meme coins will likely be fully circulating and the most important question, when evaluating whether 1,000% and higher returns are likely, is what percentage of the tokens does the team own.
Typically, the scope and intensity of a meme determines the attention, market share and value it garners among market participants.
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