As an experienced analyst, I’ve seen my fair share of market cycles in the crypto world. And I must admit, the current one has been quite unusual. Meme coins have taken center stage, with their total market capitalization surpassing that of Ripple and Cardano combined. However, this meme coin madness comes with its own set of risks and concerns.
As a researcher studying the current cryptocurrency market trends, I’ve observed that this market cycle, which is experiencing a significant downturn, can primarily be attributed to the frenzy surrounding meme coins and the ongoing anticipation for a Bitcoin Spot Exchange-Traded Fund (ETF).
Economist and trader Alex Kruger expressed his insights on the cryptocurrency market’s unusual behavior on May 1.
Meme coins have dominated the narrative, alongside bitcoin following the ETF launches, he observed.
I’ve analyzed the market trends, and unfortunately, a large number of projects have either failed or lost all value in the current crypto landscape. Meme coins, in particular, proliferated on networks like Solana and Binance Smart Chain, leading to numerous scams.
Despite the correction, large-cap meme coins have proven to be among the top performers this year, continuing to deliver substantial gains.
“Meme coins have established themselves as a viable asset class in their own right.”
Some thoughts on the current crypto cycle
#1 The crypto cycle has been almost entirely driven by the bitcoin ETF.
Despite underperforming significantly, Ethereum has delivered satisfactorily for stakeholders through its rewards program and airdrops.
#3 Solana established itself as the chain of choice for…
— Alex Krüger (@krugermacro) May 1, 2024
Meme Coin Madness
Based on data from CoinGecko, the aggregated market value of meme coins amounts to approximately $46 billion. This surpasses the market caps of Ripple (XRP) and Cardano (ADA) combined. Meme coins account for roughly 2% of the entire cryptocurrency market.
Yet, Krüger noted a concerning development as the market became inundated with questionable meme coin launches and profit-driven founders around February.
The founders prioritize earning profits swiftly and creating buzz in the short term over building for long-term success.
Some people within the cryptocurrency community hold differing opinions regarding meme coins. One group believes that these coins contribute value to the ecosystem, while others argue that they contradict the fundamental principles and objectives of cryptocurrencies.
As a crypto investor, I’ve noticed that new retail investors have been largely absent from the market recently. Instead, we’ve seen a significant influx of ETF buyers and individuals who have previously participated in crypto cycles, taking on more risk.
Sentiment Slumps
The feeling towards cryptocurrencies has noticeably soured, as Bitcoin experienced a significant decrease of around 23%, falling beneath the $57,000 mark on the previous day.
As a seasoned researcher, I anticipated this pullback based on historical market trends. It’s not an unfamiliar occurrence, with previous instances dropping as much as 30%. Bob Loukas, my fellow trader, found the situation amusingly ironic.
Logged back in to check sentiment. Good.
Maxi’s last 9 months. “ETF bro, never going to see a pullback. Up only.
Maxi’s today – “30% pullbacks in a bull market are normal”.
Never gets old.
Expect more weakness into May 16-20th.
— Bob Loukas (@BobLoukas) May 1, 2024
Bitcoin investor ‘CRG’ said nothing has changed macro-wise or fundamental-wise, adding:
In my opinion, Bitcoin is far from reaching its peak and will surpass the $100,000 mark sooner than most people anticipate. It’s during this time that significant returns on investment can be gained from alternative cryptocurrencies.
When that happens, for good or for bad, meme coins are likely to go on a rampage again.
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2024-05-02 15:12