To the chagrin of realists in the cryptocurrency ecosystem, meme coins have shot to the limelight, worming their way into the top ten largest digital assets and gaining infamy.
Dogecoin (DOGE) birthed the meme coin craze. Still, the embers were stoked by Elon Musk on X (formerly Twitter), as the billionaire openly declared support for the cryptocurrency. Riding on the buzz, several meme coins, including Shiba Inu (SHIB) and PEPE, popped up in the space, gaining instant community support along the way.
Buoyed by herd mentality and viral marketing techniques, these meme coins have seen their valuations shoot through the roof, dwarfing the gains made by Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). While skeptics have been predicting a decline in memecoin interest since 2021, they have shown little to no signs of slowing down halfway into 2024.
Since the start of the year, meme coins have netted investors the most return in the digital asset space in comparison to other categories. On average, investors in meme coins have seen their portfolios climb by 300% in 2024, while artificial intelligence (AI) tokens and DeFi generated around 150% and 50%, respectively.
A slew of positives
Despite their glaring lack of use cases, some pundits continue to advocate for meme coins, claiming that their presence in the cryptoverse is a net positive. One analyst opines that tradfi, marred by a rigid approach, can learn from memecoins’ agile nature to evolve and keep pace with rapid digitization.
Other analysts are making a case for meme coins as the perfect avenue for newbies to enter the cryptoverse. They serve as a learning curve before pivoting to projects with real-world use cases. Some hedge funds have since turned to meme coins to hedge against inflation, citing their upward momentum and global accessibility.
There is an additional argument that memecoins are potential testing grounds for new concepts in the cryptoverse, including tokenomics and community-based projects. Their low barrier to entry and daily trading volumes contribute to the ecosystem’s liquidity, while others have found success in fundraising and environmental protection efforts.
Without a doubt, memecoins have actively contributed to cross-chain compatibility in the ecosystem, leaving lasting cultural impacts throughout their nascent lifetime.