Meme Coins Come Down to Earth as Market Retracts

Bitcoin (BTC) kicked off the second week of May, falling below $27,500. The largest cryptocurrency by market capitalization went down 5.5% to trade at $27,350. While still up about 67% year-to-date (YTD) in 2023, BTC is currently down 60% from its all-time high of (ATH) of $69k.

This has been despite a favorable economic outlook for BTC, with Greg Cipolaro, global head of research at bitcoin investment firm NYDIG, stating that despite short-term price fluctuation based on on-chain data, BTC is still increasingly serving as a “buy-and-hold asset.”

“With more bitcoins being held for longer, a dwindling supply is available for short-term trading,” which may result in increased volatility, wrote Cipolaro. “Given bitcoin's fixed supply nature, this also means that fewer bitcoins are available for others to purchase. This may result in upward pressure on prices if the demand for Bitcoin grows,” he added.

Ether (ETH) followed a similar pattern, falling beneath the $1,820 level after holding $1,900 for much of the past seven days. The second largest crypto in market value has been up 54.2% YTD while being down 62.3% from the $4,880 peak.

These losses came as ETH's deflationary narrative post-Ethereum Shapella upgrade strengthened. The annualized inflation rate of ETH recently dropped to -2.7%, as more than 76,400 ETH, worth around $140 million, burned over the past week, according to ultrasound.money.

As BTC and ETH went down, the altcoins also fell in tandem, with Meme coins losing momentum and dropping even harder. According to CoinGecko, the collective meme coins market cap has fallen over 7% in the last 24 hours to now stand at $17.6 billion today.

Dogecoin (DOGE)

When it comes to meme coins, the original and the top coin in this category is Dogecoin (DOGE). With a market capitalization of $10 billion, DOGE holds its position as the 9th largest cryptocurrency.

Recently, its value dipped to $0.070, but it quickly rebounded to $0.072. In the last 24 hours, DOGE has registered a trading volume of $567.5 million.

The price of DOGE is down over 8% in the past week, 11% in the past 30 days, and 90% from its $0.73 peak. In terms of YTD, too, DOGE is barely in the green at 3.5%.

Amidst all this, an ancient Dogecoin whale suddenly came to life after being dormant since late January 2014, less than two months after the meme coin was first launched.

The whale sent 550,999 DOGE, whose value was mere $845 nine years ago and is now worth around $43,500, to a pair of unknown wallets, as per the blockchain tracker Whale Alert. Despite that, the previously dormant wallet still holds a balance of over 1 million DOGE worth about $72,400 at the time of writing.

Click here to learn all about investing in Dogecoin (DOGE).

Floki Inu (FLOKI)

Trading at $0.00003519, FLOKI is down 5.2% in the past 24 hours while managing $61.24 mln in trading volume. The meme coin is inspired by the Shiba Inu breed of dog and has a total supply of 10,000,000,000,000 and a market cap of $345.3 mln.

While up 3.5% in the last 30 days and 175% in the past year, FLOKI's price is currently down 89.5% from its $0.00033651 peak.

This past week, the meme coin's value jumped 7.6% on the back of the largest cryptocurrency exchange Binance announcing the addition of Floki in its so-called “innovation zone.” The token was listed on the platform on May 5th, allowing millions of its users to make spot purchases of FLOKI/USDT and FLOKI/TUSD.

Binance Futures also announced the launch of a new perpetual contract for Floki Inu (FLOKI). The perpetual contracts for the token on Binance offered up to 20x leverage and went live over the weekend.

Binance also issued a warning that Floki is a “relatively new” token that poses “a higher than normal risk, and as such will likely be subject to high price volatility.”

Click here to learn all about buying Floki Inu (FLOKI).

Shiba Inu (SHIB)

With a market cap of $5.17 bln, SHIB is the second largest meme coin with a total supply of almost 1 trillion tokens. On Monday, the token was trading at $0.00000907 before it dropped to $0.00000861 and is now trading at $0.00000885.

While up by nearly 9% YTD, SHIB is in the red by 11.5% in the past week and 89.75% from its $0.00008616 ATH.

The meme coin dumped just the like of the crypto market despite one of the admins of the Shibarium Telegram group teasing that major announcements are coming “very, very soon” regarding Shibarium, Shiba Inu's layer-2 scaling solution.

The project is currently in beta testing, during which it successfully processed more than 5 million transactions, according to blockchain explorer BlockScout. Meanwhile, insights from the Puppynet explorer show that the number of wallet addresses engaging with the Shibarium beta has surpassed 14 million while gas fees remain at a mere 2.0 gwei.

The Shiba Inu ecosystem comprises three unique tokens: SHIB, BONE, and LEASH. SHIB is the main token that acts as a decentralized, community-driven currency and can be used for payment.

BONE serves as the governance token which enables the Shib Army to participate in decision-making by voting on proposals through the Doggy DAO. The token also establishes the groundwork for Shibarium.

LEASH offers exclusive benefits to dedicated supporters of the ecosystem, such as exclusive rights to mint Shiboshi NFTs, increased BONE rewards for providing liquidity to DEX ShibaSwap, and priority access to land sales within SHIB's Metaverse project.

Click here to learn all about investing in Shiba Inu (SHIB).

Baby Dogecoin (BabyDOGE)

This meme coin went down to $0.000000002077 before recovering to $0.000000002178 this week. The token is down 15% in the past week, and almost 66% from its $0.000000006345 ATH hit early last year.

BabyDOGE's token supply is 420 trillion and has a market cap of $339 mln, while the trading volume recorded by the coin in the past 24 hours has been $5.2 mln.

Baby Dogecoin is a doge-themed joke token and seeks to emulate Dogecoin. Recently, the official account of the coin tweeted that the virtual crypto card of BabyDoge is ready to go live. The card is powered by FCF Pay, a Canadian crypto payments platform.

Click here to learn all about investing in Baby Doge (BabyDOGE).

SafeMoon (SFM)

Down 9.2% in the past 24 hours, the $69.8 mln meme coin has been trading at $0.00013143 while managing $1.14 mln in trading volume. SFM has been primarily on a downtrend this year.

The token was actually one of the top-performing tokens during the 2021 bull market after several celebrities endorsed the project. However, earlier this year, professional boxer Jake Paul along with five other celebrities, had a combined settlement of $400,000 with the U.S. Securities and Exchange Commission (SEC) for promoting the coin without disclosing that they were paid to do so.

Aside from this, in March, a hacker manipulated a flaw in the protocol's smart contracts and drained Safemoon's liquidity pool of nearly $9 million worth of SFM tokens. Last month, the hacker agreed to return 80% of the stolen funds valued at $7.1 million.

At the time, the two parties agreed on a 20% bug bounty to be awarded to the hacker, while Safemoon developers said they wouldn't file any charges against the hacker.

Click here to learn all about buying SafeMoon (SFM).

Meme Coins Wreaking Havoc on Bitcoin Congestion?

Before meme coins came down to earth this week, they were flying high. This frenzy swept through Bitcoin, too, and the market cap of tokens built on top of the leading cryptocurrency's blockchain approached $1 billion on Monday.

According to brc-20.io, which tracks the nascent market for tokens minted on the Bitcoin blockchain, currently, the market cap of all ‘Bitcoin Request for Comment' (BRC-20) tokens combined is around $813 million.

The BRC-20 token standard is an experimental fungible token standard for Bitcoin that allows users to issue transferable tokens directly through the network.

BRC-20 tokens have only been existing for two months after being pioneered by the pseudonymous on-chain data enthusiast Domo, who took inspiration from the ERC-20 token standard on Ethereum. Domo launched a token called ORDI in March, and this week, it was listed for trading on Gate.io and Crypto.com, suggesting the experimental token might be starting to gain mainstream adoption.

Other BRC-20 tokens like PEPE, a different one than the Ethereum meme token of the same name, MEME, PIZA, and DOMO, have followed suit. With this, Bitcoin is now also going through a meme coin mania, as seen by the wider crypto market in the past with Dogecoin and Shiba Inu. As per OrdSpace, more than 11,000 tokens have already been issued on Bitcoin and are available on the open market.

The popularity of BRC-20 tokens is having a noticeable impact on Bitcoin transactions, as evident from the fact that more than half of all Bitcoin transactions are related to BRC-20 tokens, according to Dune.

This actually led crypto exchange Binance to briefly halt Bitcoin withdrawals twice due to network congestion. On Monday, there were nearly 415,000 unconfirmed transactions on Bitcoin.

Meanwhile, fees on the Bitcoin blockchain surged to two-year highs due to this meme coin mania and the rising popularity of the Ordinals protocol. Average transaction fees on the Bitcoin network went to nearly $20, up from last week's average of $1.20. These levels have not been seen since the May 2021 bull market.

Trading Meme Coin: Gambling or Smart Investment?

As we saw, meme coins tend to have high volatility, which means their prices fluctuate widely and, of course, unpredictably. This is exactly what makes them attractive to traders and investors alike. But while this means quick profits, it can just as easily lead to huge losses.

In this manner, the high volatility of meme coins can be compared to gambling, as both involve taking risks in the hope of making a quick profit. Not to mention, meme coins often lack fundamental value and are primarily driven by hype and speculation.

This lack of fundamentals can make it difficult to assess the true worth of a meme coin, and here you are essentially betting on the success of a particular trend or meme. However, they are not much different from other cryptocurrencies.

Although meme coins may lack practical utility, they can still have long-term value if they gain widespread adoption and use. One prominent example of this is – Dogecoin. It started as a joke but has since gained a significant following and is now accepted as payment by many merchants, including Tesla. This shows that even meme coins can have value beyond their initial hype.

In conclusion, trading and investing in meme coins is all about one's perspective and approach. And as with any investment, it is important to do your research and invest only what you can afford to lose.