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Industry leaders debate the future of meme coins as market cap drops

Industry leaders debate the future of meme coins as market cap drops

GrafaGrafa2024/09/03 05:25
By:Isaac Francis

The meme coin sector, once a vibrant part of the crypto ecosystem, has seen its market capitalization fall below $40 billion, now standing at $39.69 billion.  

This marks a 3% decrease in the past 24 hours and over a 12% decline over the last week, according to CoinGecko data.  

The sharp decline reflects a shift away from the days of rapid growth and investor excitement toward a more cautious and saturated market.  

Industry experts are weighing in on the future of meme coins.  

Ran Neuner, a seasoned figure in the crypto space, declared the meme coin market “dead,” attributing the downturn to market oversaturation.  

"When there were fewer coins, the probability of making money was skewed slightly more in your favor," Neuner explained.  

Similarly, Shu Zhu, co-founder of the now-defunct Three Arrows Capital, noted the excessive number of meme coin projects as a factor contributing to the sector’s saturation.  

Crypto analyst Crash echoed these sentiments, describing the decline as a "great cleansing" that will bring balance back to the market.  

"There were way too many projects, and degeneracy. Balance is being restored. Accept it, get better, and survive," he commented.  

Despite the bearish sentiment, Neuner suggests two possible strategies for traders still interested in meme coins.  

The first strategy involves aligning with insider groups that invest early, provided that investors understand the risks of insiders selling off tokens.  

The second strategy focuses on reviving older meme coins that still maintain community support and influence, potentially offering a more stable investment route in the volatile market.  

Data from Lookonchain shows significant declines for major meme coins.  

Dogecoin (CRYPTO:DOGE) and Shiba Inu (CRYPTO:SHIB) have fallen by 57.93% and 70.86%, respectively, from their peak values.  

Other meme coins like Pepe (CRYPTO:PEPE), Bonk (CRYPTO:BONK), and Floki (CRYPTO:FLOKI) have also seen sharp declines, with losses ranging from 43.77% to 79.48%.  

This broad downturn reflects a growing investor retreat from meme coins, likely due to their volatile nature.  

Critics have pointed fingers at Pump.fun, a platform that facilitated the launch of over 2 million meme coins, for contributing to market oversaturation.  

Despite this, Pump.fun has generated over $100 million in revenue since its launch, starkly contrasting the dwindling fortunes of the coins it helped create.  

The decline in meme coin valuations highlights the inherent volatility and risks associated with these investments.  

As the market evolves, investors are increasingly cautious, favoring projects with strong fundamentals over those driven by hype and novelty.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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