The rise in interest in meme tokens after a short lull suggests that risk appetite is once again emerging in the cryptocurrency markets. This is confirmed by the rise of popular tokens such as Pepe (PEPE).
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According to the data, meme tokens stand out among more serious cryptocurrencies. Over the past monitoring period, leading assets showed small losses, while meme tokens showed their usual daily gains at a high level.
However, the behavior of meme tokens goes beyond the normal fluctuations in their value. It also indicates a return to risk appetite in the market.
The market capitalization of meme tokens closely tracked the overall market recovery. The assets responded to the increase in trading volumes and were able to restore their market capitalization to $50 billion, an increase of 25%.
Meme tokens are up 42% in the last quarter and a whopping 289% year to date. Thanks to these dynamics, meme tokens can become a tool that can help avoid portfolio stagnation. However, it is worth considering that meme assets also consume liquidity, which in past cycles could have supported utility projects.
Additionally, a large number of meme tokens can create problems for the networks that use them. For example, on the Pump.fun platform alone, more than 1.4 million new tokens have been created since the launch of the project. Meme tokens take up valuable network bandwidth without offering any benefit or even minimal product.
Due to the large number of meme tokens, some users even refuse to use networks such as Arbitrum and Base. Unlimited token creation can lead to increased fees or delays, even on fast networks.
From a financial perspective, meme tokens compete for already scarce liquidity. Most L2 networks still depend on the influx of Ethereum-based stablecoins to trade other assets. The Solana blockchain relies on SOL, and some pools require WETH to facilitate the trading process. Without constant liquidity support, meme tokens quickly lose their value.
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