Analysts unveil key reasons for meme coins popularity
Why have meme tokens become so popular among traders? Analysts suppose that stagnation in more reliable crypto assets is the main reason for such popularity. Notably, a rising appetite for risk also explains why traders choose such tokens.
In early October, the price of several digital currencies, which feature the image of a Japanese breed dog Shiba Inu, showed a significant jump. The Shiba Inu token as well as Akita Inu and Dogelon Mars are among the best performers. Thus, the Shiba Inu token has entered the ranks of the world's top 20 cryptos in terms of the market capitalization. In one week, its price skyrocketed by 324%. The price of the Akita Inu token surged by 274% and Dogelon Mars soared by 190%.
The meme currencies achieved such a spectacular success thanks to Elon Musk’s publications on Twitter, especially the one with the photo of his Shiba Inu puppy. In addition, Elon Musk is known for his eye-catching twits that have attracted investors’ interest in various cryptocurrencies.
However, demand for meme tokens depends not only on speeches and posts provided by reputable and famous people. Stagnation in larger and more stable coins such as bitcoin also boosts the interest in meme coins. After a rapid rise, bitcoin has become less volatile, showing a more stable dynamic. However, market participants prefer more active trading in order to make money faster.
Meme tokens meet such requirements and provide traders with the opportunity to enjoy risk trading. Such an approach looks like gambling and it will hardly suit everyone.
ENCRY's founder Roman Nekrasov is sure that this theory is true. At the same time, he warns against investing all the funds in such assets. Trading of meme tokens is very risky since it is almost impossible to predict their future movement.
Vladimir Smetanin, CEO of Swiss-based financial company Newcent, supposes that the popularity of such assets is extremely unstable and they may lose it as fast as they achieved it. Notably, the actions of some big players of the crypto market may cause a collapse in any asset. Not so long ago, bitcoin climbed to $55.5 thousand for the first time since May 2021. Ki Young Ju, CEO at CryptoQuant, explains such a rally by whale buying. It means that big players invested $1.6 billion in bitcoin in just 5 minutes.
UK considers diplomatic boycott of Beijing Winter Olympics
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15:31 2021-11-29 UTC+00
Crypto billionaire Su Zhu ‘abandons’ ether due to high transaction fees
Su Zhu, CEO and founder of Singapore-based hedge fund Three Arrows Capital (3AC), has abandoned ether, citing issues related to the network's expensive transaction fees. This scares away newcomers to the crypto market, he points out.According to the expert, he refused to use the world’s second-largest cryptocurrency "despite supporting it in the past".
14:21 2021-11-29 UTC+00
NYC gets its own crypto
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10:58 2021-11-29 UTC+00
Traders bet on oil prices soaring to $200 per barrel
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13:48 2021-11-26 UTC+00
McKinsey reveals global balance sheet report
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12:24 2021-11-26 UTC+00
Many Americans think economy getting worse
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12:20 2021-11-26 UTC+00