Meme coins are currently seeing an upward trajectory as the entire crypto market embarks on a bull run. However, Bloomberg highlights that the current level at which meme coins are pacing was similar to that of the crypto bubble that burst two years ago. The market is anyways cautioned for a possible correction. However, a bubble burst would send sock waves just like in 2021.

Meme Coin Frenzy Raises Concerns

Bloomberg says that meme coin’s trading volumes are currently at levels last seen shortly before the last crypto bubble burst more than two years ago. With more investor traction, the meme coin frenzy in the digital asset market shows no signs of abating. Meme coins, such as Dogwifhat and Pepe, are gaining significantly more traction than Bitcoin. The trend comes despite these coins being among the most speculative and volatile cryptocurrencies. According to data gathered by blockchain data firm Kaiko, trading volume for the top meme coins—which frequently trade for pennies on the dollar—reached around $80 billion in the last week. Since October 2021, that is the highest.

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The 2021 Crypto Bubble Burst

At present, Meme coins are capitalizing on the positive trend in the cryptocurrency industry and exhibiting significant growth potential. In the same tone, Bitcoin has hit its all-time high value, bolstering positive sentiments among the market participants. However, after an all-time high level in 2021, the crypto market experienced one of its most dreadful moments.

CNBC reported that the two biggest digital currencies lost three-quarters of their value in the year since Bitcoin peaked at almost $68,000, plummeting with the riskiest tech companies. The industry’s value dropped from over $3 trillion to about $900 billion. By the end of 2021, Ethereum had dropped over 23% to $3,769.70. Bitcoin had also dropped nearly 30% from its peak of $47,686.81.

Why are Meme Coins Popular?

Investopedia defines the term “meme coin” as a cryptocurrency name that is based on people, animals, characters, works of art, or anything else that can be imitated. Most are meant to be lighthearted and enjoyable, and they are backed by passionate online merchants and followers. Although some people find these coins amusing, they are volatile investments. Rivals of Shiba Inu Coin, such as Pepe (PEPE), Floki (FLOKI), dogfight (WIF), and Grok (GROK), are resolved to send rockets to the moon in 2024, driven by the growing need for less expensive investment options.

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The post Meme Coin Rise Historical Data Reignites Fears of Crypto Bubble Burst appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am