Business
The Rise of Meme Coins in the Cryptocurrency Sector
Explore the phenomenon of meme coins gaining popularity in the cryptocurrency sector, their impact on the market, and the rise of community-driven digital assets.
The meme coin sector, valued at an impressive $53 billion, experienced a notable surge of over 12% on Tuesday. Coins like pepe (PEPE) and dogwifhat (WIF) saw substantial gains of 22% and 25%, according to data from CoinGecko.
The surge in meme coins followed Bitcoin’s recovery to a one-month high of $65,000, subsequently settling at $63,000. This trend suggests that traders are capitalizing on profits from established assets like BTC and ETH, diversifying into more speculative investments such as meme coins.
The CoinDesk 20 Index (CD20), which tracks the performance of large-cap tokens, also showed a positive trend, recording a 2.3% increase over the past 24 hours.
Recent events in American politics, such as the shooting incident involving presidential candidate Donald Trump at a rally in Pennsylvania, led to the issuance of meme coins like America Coin (USA) and Super Trump (STRUMP), which saw impressive gains of 204% and 43% respectively post-incident.
Historically, meme coins thrive when BTC and ETH trade within a narrow range near their peaks but tend to struggle during market downturns. For instance, dogwifhat surged by over 60% in May while BTC traded between $66,000 and $69,000. However, WIF experienced a 60% decline in value over the following month as BTC plunged by 21%.
Bitcoin’s current market depth on Binance stands between $14.8 million and $11.2 million, a mere 2% difference from the current level. In contrast, WIF’s market depth ranges from just $1.4 million to $1 million, indicating that market orders and liquidations could significantly impact meme coins like WIF compared to larger tokens such as BTC and ETH.