Cryptocurrency exchange Binance was recently published. Understanding the Rise of Memecoins A report called ‘Investor Profile’ focuses on this field.
Claiming that Memecoins embody the fundamental principles of the cryptocurrency industry, the report said, “There appears to be a clear priority given to financial profit and less attention to technological development.”
The market value of Memecoins is increasing day by day.
The ratio between the total market value of memecoins and altcoins has almost tripled since 2022. But the rate is still below the peak of 12 percent recorded in 2021.
Generation Z Underperforms in Crypto Investments
As reported by Binance 76.5 percent of cryptocurrency investors come from Generation Y. While Generation Z, representing the ages of 18 to 24, draws attention with a relatively small share of 17.4 percent, Generation X, between the ages of 41 and 56, invests in crypto with 4.9 percent. Vala is the lowest group.
75% of memecoins in the market were generated in the last year.
The report highlighted the astronomical growth recorded by new and popular memecoins in a short span of time. For example, WIF reached a market value of $1 billion in 104 days. SHIB reached this level in 279 days, while DOGE took eight years to reach a market cap of $1 billion. The Binance report noted that 75 percent of the memecoins traded on the market were created last year.
Inflationary environment leads to memecoins.
The Binance report, which examined the economic and socioeconomic factors behind the interest in memecoins, emphasized that the global money supply will grow by more than 25% between 2020 and 2022, to over $81 trillion. It will reach 102 trillion dollars. While it was noted that the contemplated monetary expansion caused inflation to rise, attention was drawn to the US inflation rate, which is measured at 7 percent in 2021 and 6.5 percent in 2022. According to the report, individual investors turned to memecoins that promise higher returns due to the inflationary environment under consideration.
The report includes the following statements: “In the context of a rapidly expanding global money supply, riskier investments are becoming more attractive. While the majority of this capital is directed toward traditional assets such as the S&P 500 and real estate, some Major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) are also flowing in. “At the extreme end of the spectrum, memecoins stand out as high-risk, high-reward investment vehicles for additional capital.”
Long-lived memecoins are hard to find.
However, memecoins, which have the potential to earn more in the short term, also carry more risk. In fact, according to Binance report, 97% of memecoins issued between 2023-2024 were almost zero. Only a few memecoins, such as Dogecoin and Shiba Inu, have managed to survive in the long term. It is useful to be careful when investing in memecoins, which bring high returns in a short period of time but carry high risks.
This article does not contain investment advice or recommendations. Every investment and trading venture involves risk, and readers should do their own research when making decisions.
