While most crypto investors are focused on Bitcoin’s records, memecoins have also enjoyed strong rallies.
Currently, there are three memecoins in crypto’s top-20 by market cap: Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE).
Analysts from the traditional finance space have long expressed their skepticism about memecoins and predicted their imminent collapse. These predictions did not come true, and the sector continues to grow at a robust pace.
The numbers are truly impressive: Dogecoin’s market cap exceeds $50 billion, making it the seventh biggest cryptocurrency in the world. Dogecoin is bigger than the world’s second most popular stablecoin, USDC, which has a market cap below the $40 billion level.
Donald Trump’s election victory served as the key catalyst behind the strong rally in memecoins. His team includes Elon Musk, who has repeatedly expressed his interest in Dogecoin.
This time, Musk plans to create a Department of Government Efficiency, or D.O.G.E. With such support, it’s not surprising to see that traders rushed to buy DOGE, while other memecoins moved in sympathy with the world’s leading memecoin.
While Musk’s ambition to create D.O.G.E made a strong positive impulse for memecoins, a major rally would have not been possible without a solid base. We are talking about coins with a huge market cap, so it takes a lot of money to move them.
The key reason why leading memecoins have established themselves in crypto’s top 20 is that you can actually use them to pay for goods and services. It’s not that easy with Pepe (yet), but DOGE and SHIB are accepted by many businesses.
Obviously, they have not become a universal means of payment (and, most likely, they will not achieve this kind of success), but memecoins have already crafted a certain niche for themselves. Cheap transaction fees increase the popularity of memecoins and make them a decent choice for businesses, who are searching for new ways to build relationships with their customers.
Dogecoin’s success has already attracted many players into the memecoin space. New memecoins are launched regularly, and the sector keeps growing. As a result, the total market cap of all memecoins exceeds $110 billion. In comparison, AI and big data – related coins have a total market cap of just $40 billion.
It’s worth noting that investing in the memecoin sector comes with significant risks. Unfortunately, some memecoin creators plan to “take the money and run” and have no plans to develop their coins into mature products with vibrant ecosystems.
Meanwhile, the memecoins that have already reached “critical mass” become a means of payment and continue to grow. Such memecoins will stay on the path of growth despite the emergence of new, hyped up coins. Unlike analysts from the traditional finance space, crypto investors understand the value brought by a growing ecosystem. If such an ecosystem is represented by a picture of a cute dog – so be it. At this point, it is clear that memecoins are here to stay.
