By Nermeen Nabil Memecoins suffered steep losses following a drop in Bitcoin’s value, which triggered broader market declines.
The memecoin market has experienced a major downturn, with Dogecoin (DOGE) and Shiba Inu (SHIB) among the top tokens hardest hit. Data from CoinGecko shows that DOGE was down almost 4% in the last 24 hours while SHIB fell by 4.3%.
The total market cap of memecoins has dropped below $40 billion, data shows. The drop in memecoins’ value, which is highly influenced by speculation and social sentiment, suggests a huge decrease in investor demand.
Markets Slammed
Lookonchain reported that top meme coins have seen an average decline of 63.73% from their peak values over the past year. Dogecoin and Shiba Inu, previously celebrated for their robust communities, are now struggling to maintain their value in an oversaturated market.
DOGE has decreased by 57.93% and SHIB has been down by 70.86% over the past year, per Lookonchain’s data. Other prominent memeccoins like Pepe (PEPE) and Dogwifhat (WIF) also entered steep correction, with a decline of 58.16% and 70.93%, respectively.
Bonk, Floki, Brett, Popcat, Book of Meme, and Cat In a Dogs World, also joined the struggling memecoin market.
The ongoing memecoin market downturn comes as Pump.fun, a Solana-based memecoin platform, sees a loss of momentum. At its peak, the platform saw over 20,000 new tokens launched in a single day.
However, Pump.fun has seen a major drop in user activity and new token creation, with only 5,388 new tokens launched recently. It may be the start of tough times.
Apart from the overall bearish sentiment, the launch of competing platforms like Ethervista on Ethereum and SunPump on Tron has drawn users and revenue away from Pump.fun. Reduced trader interest was also shown in Solana’s reduced daily revenue.
Are Memecoins Dying?
Memecoins are currently facing challenges and could potentially experience an existential crisis similar to what non-fungible tokens (NFTs) have gone through
Many meme projects have already failed or are rapidly declining in value, with estimates suggesting that 99.9% of meme coin ventures are being wiped out
Newer or smaller cap meme coins are particularly susceptible to failure due to lack of maturity and support. Without a strong community or real utility, these projects may struggle to maintain value over the long term.
Many investors might also pull out of memecoins in response to the overall bearish trend in cryptocurrencies. The total crypto market has dropped by 5.6% in the last 24 hours, with Bitcoin dipping below $56,000.
Bitcoin Leads Markets
Bitcoin is currently changing hands at around $56,500, registering a slight recovery after recent fall but still posting 4% loss in a day, data shows. Top tokens such as Solana and Ether also saw declines exceeding 7%.
Bitcoin’s value plummeted as global stock markets faced sharp declines. The US stock indices, Nasdaq 100 and S&P 500, dropped by up to 3.5% on Tuesday. Meanwhile, Japan’s Nikkei index experienced a more than 4% decline.
Concerns about the economic outlook have been on the rise as the global market enters September, a key month with focus mainly on the Fed’s interest rate decision. Weaknesses in economic activity and demand raise fears of a broader economic slowdown.
The prospect of less restrictive monetary policy from the Fed, with potential interest rate cuts, is actually seen as a positive for crypto by some analysts. However, some experts have warned about Bitcoin’s short-term price decline in the event of a rate cut.
Arthur Hayes, the co-founder of BitMEX, suggested that a potential rate cut may not provide the expected benefits for Bitcoin and could even have negative implications. He also pointed out that the Fed’s decisions are closely tied to the economic outlook, and any signs of economic weakness could lead to a more cautious approach from investors.
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Nermeen Nabil Khear