Shiba Inu posted a significant 25% recovery in one week, while DOGE gained over 6%. Let’s look at the numbers and find reasons behind the meme coin rally.
It’s been a wild ride this past year for cryptocurrency investors – from wild dips to devastating collapses, the crypto markets have been a roller coaster.
After a brief drought, meme coins are making a major comeback, and investors are eagerly diving in. Amidst speculation and social media chatter, the question remains: is meme coin season truly back?
While it may be too early to answer, it’s worth noting that trading volumes in crypto-based tokens have seen a significant spike since the start of the year.
Moreover, the global market cap of meme tokens reached $21.54 billion as of Feb. 6, holding a little more than 2% weightage of the global crypto market cap.
DOGE makes a comeback
Last week, the price of Dogecoin (DOGE) surged considerably following a Financial Times report that tech mogul Elon Musk is looking into creating a payments system for Twitter, bringing speculation that the cryptocurrency could become integrated into the social media site.
On Feb. 4, DOGE reached its highest 30-day peak at $0.09953, but as of Feb. 6, the altcoin had dropped by x% to $0.09209. Despite this dip, DOGE still has an impressive YTD gain of x% (0.07069).
As DOGE reaches new highs, the burning question is: can it sustain these gains? Some are optimistic that Twitter could provide a use case for the cryptocurrency, yet others remain wary of its full potential.
Shiba Inu (SHIB) regaining traction
Last week was an exciting time for Shiba Inu (SHIB), the world’s second-largest meme coin by market cap.
On Feb. 4, SHIB reached a 90-day high of $0.00001562. However, by Feb. 6, the price had dropped slightly to $$0.00001462, a decline of x%.
This spike in value was propelled by positive sentiment in the broader crypto market and Shiba Inu’s addition of a new anonymous transaction feature through the Bermuda Privacy dApp.
This new feature allows SHIB users to perform transactions in much the same way as other privacy coins like Zcash and Monero.
In addition, anticipation for the upcoming launch of the ‘Shibarium’ blockchain has been credited for the Shiba Inu price surge. Shibarium is expected to provide users with a range of smart contract capabilities, such as launching tokens, executing trade agreements, and using decentralized exchanges.
In a blog post, Shiba Inu developers wrote: “We are approaching the finishing touches for Shibarium’s Beta and its imminent launch.”
Risks associated with meme tokens
One of the most common issues with meme coins is an increased likelihood of price manipulation. Since these coins can typically be bought and sold relatively quickly, they can be highly susceptible to market manipulation.
For example, DOGE saw its value increase significantly in 2021 due to coordinated buying by some users.
Another issue with meme coins is their lack of utility value, meaning their value is mainly driven by speculation rather than any intrinsic value.
In other words, a meme coin is worth how much people believe it’s worth, as opposed to what it can be used for. As a result, meme coins can be more volatile and unpredictable than other cryptocurrencies, making them riskier investments.
Finally, meme coins often result from scams, with some creating them to exploit unsuspecting investors. While some reputable meme coins exist, some are created without any real utility or purpose aside from making money for the creators.
In conclusion, meme coins can be an exciting and potentially lucrative type of cryptocurrency, but they also come with risks that investors should be aware of. Understanding the issues associated with meme coins is critical to making an informed investment decision.
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