- Memecoins outperform the rest of the crypto market by a massive margin in Q1.
- Observers suggest memecoin popularity is linked to deteriorating economic conditions.
- Memecoins and FOMO crypto culture are inextricably linked.
In the highly changeable world of cryptocurrency, memecoins have carved out a unique niche, bringing fun and playfulness in contrast to the often technical and serious nature of blockchain. From the whimsical Dogecoin to the latest cat-themed trend, these “joke” cryptocurrencies have captivated the attention of both seasoned crypto enthusiasts and newcomers alike.
However, the outsized performance of memecoins in recent months has led some to wonder if this frenzy is a symptom of the broader societal and economic issues that have become increasingly evident in recent years.
Memecoins Outperform the Rest of the Crypto Market
As noted by Will Clemente, co-founder of Reflexity Research, memecoins massively outperformed other crypto sectors in Q1. The CoinGecko data showed that the top 10 memecoin projects returned an astounding 1,300% in Q1, dwarfing the performance of every other crypto subsector. The next nearest category, real-world assets, managed a comparatively modest 298% gain, followed by AI-related tokens at 210%.
This outsized investment appetite for memecoins suggests there may be more to this phenomenon than a fondness for internet-powered jokes. Meme connaisseur pepeXBT argued that memecoin mania is driven by growing desperation, as people struggle to afford basic life milestones like buying a home, sending their children to good schools, or even enjoying simple luxuries like vacations or dining out.
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Similarly, X influencer intuitio contended that the “rise of memecoins marks the pinnacle of human desperation.” The influencer posited that with a “great reset” looming, people have abandoned caution, viewing memecoins as the final “vehicle to safety” in a world that has left them feeling hopeless.
However, an equally relevant factor in memecoin outperformance last quarter is the ever-present get-rich-quick narrative that has driven past meme-manias.
Meme-Mania For the Jackpot
The origin story of the first memecoin, Dogecoin, was simply poking fun at the overly serious nature of the cryptocurrency industry. Still, its unreal 16,000% gains over the five months to May 2021 demonstrated the get-rick-quick potential that memecoins can offer in a relatively short period.
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Research conducted by Henley & Partners estimated that there are 88,200 crypto millionaires, with around half holding their wealth in Bitcoin. With Bitcoin currently floating around the $70,000 mark, it is prohibitively expensive for the average individual to acquire a whole coin, let alone several, making memecoins particularly appealing to those late to the party but still intended to strike it rich with crypto.
Moreover, when considering the powerful psychological effect of FOMO, where apeing into the next moonshot lifts prices higher, leading to more demand in the hopes of getting rich quickly, a booming memecoin sector should be expected.
On the Flipside
- Gold hit a new ATH of $2,400 on April 12. The precious metal is considered an inverse barometer of economic health.
- The US dollar remains the world reserve currency and the largest global economy.
- The Great Reset was a term used by the World Economic Forum as a response to the pandemic.
Why This Matters
The surge in memecoin outperformance may underscore the dark reality of individuals feeling hopeless about their prospects. Yet FOMO and the desire to get rich quickly are also equally pertinent factors. It so happens that memecoins are the ideal vehicle for gambling at financial salvation.
Read more about the latest play by Dogecoin whales here:
314M Dogecoin (DOGE) Frenzy Ensues Despite Memecoin Slump
Victims of Chinese investment fraud want the UK to return seized funds. Read more here:
Chinese Crypto Fraud Victims Demand Return of £3B from UK
