Once a thriving part of the crypto ecosystem, the meme coin sector has recently seen its market cap fall below $40 billion. According to CoinGecko, it now stands at $39.69 billion, down 3% in the last 24 hours and more than 12% in the previous week.
This economic slowdown marks a sharp reversal from the halcyon days of rapid growth and investor enthusiasm.
Are Meme Coins Dead?
Industry veteran Ran Neuner has declared the meme coin market “dead,” attributing its decline to an oversaturated market.
“When there were few coins, the probability of winning money was actually slightly more in your favor,” Neuner says.
Shu Zhu, co-founder of the now-defunct Three Arrows Capital, agreed with Neuner, citing the influx of Neiro meme coins as an example to highlight the saturation of the meme coin market.
“This is a big cleanup. There were way too many projects and degeneration. The balance is being restored. Accept it, improve and survive,” crypto analyst Crash said.
Read more: 7 Meme Coins and Altcoins That Are Trending in 2024
Despite the gloomy market outlook, Neuner outlines two possible trading strategies for the more intrepid. The first is to embed yourself in the “cabal” – groups of insiders who invest early. Neuner believes this is an interesting play if investors enter the market with a small market cap and exit before the insiders dump their chips.
“But you have to know the rules, and the rules are that the cabal is going to dump its coins on you as it grows, and you just hope that it does it responsibly so that it doesn’t ruin its credibility, so that it can keep repeating the same scenario,” Neuner said.
The second strategy proposed by Neuner focuses on rejuvenating older meme currencies that still have market influence and community support. This approach can offer a more stable investment path in a volatile market.
On the other hand, Lookonchain data reveals a sharp decline for major cryptocurrencies, with average losses of 63.73% from their peak values. Notable cryptocurrencies like Dogecoin (DOGE) and Shiba Inu (SHIB) have fallen by 57.93% and 70.86%, respectively. This decline extends across the board, reflecting the widespread withdrawal of investors from these assets:
- Pepe (PEPE): -58.16%
- Dogwifhat (WIF): -70.93%
- Bonk (BONK): -64.63%
- Floki (FLOKI): -65.97%
- Brett (BRETT): -62.59%
- Popcat (POPCAT): -43.77%
- Book of Memes (BOME): -79.48%
- Cat in a Dog World (MEW): -62.99%
Pump.fun, a platform that has launched over 2 million coins, has been heavily criticized, with many in the community blaming it for the oversaturation that has eroded the industry’s profitability. Yet Pump.fun has generated over $100 million in revenue since its launch, a figure that stands in stark contrast to the fortunes of the coins it helped create.
Read More: 11 Best Solana Meme Coins To Watch In September 2024
This economic downturn highlights the broader volatility and risks inherent in cryptocurrency investments. Investors are becoming increasingly cautious, favoring projects with strong fundamentals over those driven by market whims or novelty.
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