Memecoins Market Cap Jumps 22% Following Recent US Elections
Memecoins play a significant role in the blockchain and cryptocurrency sectors, as highlighted by Binance Research.
The Binance report indicates that the rise of memecoins aligns with the global increase in money supply. As capital becomes more accessible, investments in Bitcoin, altcoins, and memecoins gain appeal.
Despite their potential for high returns, memecoins are risky due to their speculative nature and limited use cases. Their market cap surged by 22% following the US election, demonstrating resilience. Notable gainers include Doge and PEPE coins, which rose by 15% and 11% respectively.
Binance Research: 75% Of All Memecoins Launched Last Year
A November 2024 report from Binance notes that meme currencies are gaining traction as investors seek risk-on opportunities. The niche has seen its market value triple since 2022, driven by growing popularity.
The report also highlights regulatory skepticism towards Initial Coin Offerings (ICOs), prompting developers to explore private venture capital funding. This approach, termed “Low Float and High FDV,” limits the availability of tokens while maintaining higher valuations.
Memecoins Remain An Accessible Investment Option
This strategy benefits developers and early investors but may pose risks to regular investors. Consequently, many retail investors turn to meme tokens as alternative investment avenues, contributing to their accessibility.
According to Binance, approximately 75% of all meme currencies were launched last year. While initiating these projects is relatively easy, sustaining them presents challenges; around 97% of memecoins have failed, with the remaining few benefiting from recent electoral events.
Memecoins Jump by 22% In A Day, Thanks To Election Hype
Although considered community-driven investments, memecoins remain speculative. Many anticipate a “meme coin supercycle” alongside Bitcoin's performance, which has materialized, elevating the memecoins' market cap to over $73 billion—a 22% increase.
Featured image from xtsupport.zendesk.com, chart from TradingView