Today market is up! All cryptos are up! But ever wonder why Meme coins are pumping so hard?
Well, as an expert and a person with 7 years of experience in crypto, blockchain & web3 development, I wouldn’t advice anyone to go for meme coin. However, I think I should explain this.
No, you cannot find the answer buy looking at charts. You need to look at the market itself.
A lot of money is coming to crypto market, as stock and forex market is now bit complicated, crypto getting famous day by day.
When a person comes, either he invest all his money on a single coin (I was that kind of person when I came to this crypto world. Invested largely on Bitcoin.) or he invest in 5-10 different coins.
Now some platforms created auto invest features, some created index funds for crypto.
Now usually they have this following ratio.
1:1:1:1:1:1:1:1:1:1 or 3:2:2:1:1:1:1:1:1:1 or 3:1:1:1:1:1:1:1:1:1.
Usually they focus on BTC, ETH and BNB and other coins they give equal stake in the portfolio.
Or they just evenly distribute the total portfolio among the coins.
I don’t want to comment on their strategy. But let’s come to the point why MEME coins are pumping hard.
Suppose a person came to invest 100k USD in crypto market. Now if he follow one of the strategies, for this example let’s think 1:1 for 10 coins, he basically investing 10k in each coin. Now other good coins, they already have huge value. So this will not have a huge impact on the pricing.
But think about a Meme coin or new coins or coins with very less value, they will start getting bullish trend. So the price will go up.
Now there is a thing. The people like me, who is in crypto market for a while, who knows what he is doing, will take this opportunity and prepare for a exit from Meme coin. So eventually the price will drop.
But the guy who invested 100k won’t even realise, as when meme is getting dumped, his overall portfolio will be increasing. Because investors like me will possibly take money from meme and invest in AI coins or another potential coins or coins like TRX, XRP, DOT, LINK, UNI.
#Salid $SOL