The recent crypto crash hit memecoins hard, culminating with a 9% drop in total market capitalization from Aug. 14 to Aug. 21. During the same period, Pepecoin (PEPE), Shiba Inu (SHIB) and ApeCoin (APE) saw a 25% decline. The big question is whether this trend will affect the wider market, signaling a broader bear market, or simply reflects lagging performance of memecoins.
Memecoins like Dogecoin (DOGE) burst onto the scene, driven by viral memes and community enthusiasm. However, their appeal faded due to a mix of factors. These coins rely on media hype and online communities for attention, yet they lack value beyond their meme origins. Their speculative nature leads to rapid price changes and volatility.
Furthermore, the memecoin market has become saturated with copycats, drawing focus and resources to more traditional cryptocurrencies.
Capital rotates as investors shift their attention to new trends
For traders, the mid-August crypto market crash was a stark reminder of memecoin volatility. Many of these coins emerged in the last six months, like PEPE and Milady Meme Coin (LADYS). This might push new entrants away and create a negative sentiment, potentially extending a bear market to the broader crypto landscape.
However, this underperformance is typical for memecoins, as seen in the past, like when APE, SHIB and PEPE lagged the total crypto market by 18% between June 5 and June 15.
These two instances don’t necessarily mean memecoins will always perform worse than the broader crypto market. They reflect a higher beta in the sector, where memeco
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Author: Marcel Pechman
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