Memecoins are one of the trends in the cryptocurrency industry in 2024. These are cryptocurrencies or tokens inspired by memes, famous people, everyday life situations, animals, etc.
There are also memecoins inspired by serious assets. For example, CriptoNoticias has reported the existence of a Solana network token that “pays homage” to the GameStop (GME) stock.
What relationship does the GME memecoin have with the GameStop company or the real stock? None. What is the GME memecoins for? Not at all (or well… it serves to speculate on its price, but not much else).
Today, October 29, bitcoin (BTC)’s rise above $70,000 is driving much of the market higher of digital assets.
An attention-grabbing token is SPX6900 (whose ticker is SPX). This crypto asset pays tribute to the S&P500which is the index that brings together the most valuable companies in the United States. It is probably the best-known stock index in the world.
SPX is a token that “lives” on the Ethereum network (although it also has a version wrapped in Solana) and, as with GME, has no connection with the real SPX (stock ticker of the S&P500 index). Its market capitalization is more than $900 million.
The following graph, taken from the CoinMarketCap platform, allows us to observe the historical behavior of the price of the SPX token (whose greatest liquidity is found on the decentralized exchange Uniswap):
As can be seen, this digital currency is setting all-time highs right at the time of this publication and is about to reach 1 dollar.
Among the reasons driving the rise is the fact that It is the favorite memecoin of Murad Mahmudova former bitcoin maximalist turned memecoin trader, who anticipates a “memecoin super cycle” for 2024 and 2025.
The influence of this character means that the memecoins that he names (among which GIGA, POPCAT and MOG also stand out) tend to shoot upwards.
Memecoins: from internet jokes to notable financial assets
Currently, memecoins have ceased to be simple jokes on the internet and have become financial assets that occupy prominent places in the cryptocurrency ecosystem.
Some of them have managed to attract so much attention and capitalization that today they are in the top 100 cryptocurrencies by market value. Dogecoin (DOGE), for example, which began as a mockery in honor of the famous Shiba Inu dog meme, now has a capitalization of $24 billion and has even been adopted as a means of payment in some stores.
This phenomenon raises questions about how the public perceives the value of digital assets and their role in the financial market.
But why does this type of “investment” arise? Part of the explanation lies in the so-called “financial nihilism”, a concept increasingly cited in economic circles.
As more people lose confidence in traditional financial systems, some are looking for alternatives that challenge the system, although not always seriously.
Memecoins represent a kind of rebellious attitude: investing in something that, objectively, has no intrinsic value or real utility. It is a response to a system that many consider unfair or in decline.
This financial nihilism is also linked to entertainment and the viralization of social networks, where influencers and celebrities have promoted the use of these cryptocurrencies.
In the era of immediacy and constant connection, It is possible for a trend or meme to become an investment asset in a matter of hours. This attracts those looking for quick profit opportunities, even with high risks.
Another factor that explains the popularity of memecoins is the generation of strong communities. Although they lack a tangible purpose, these assets generate a shared identity among their users.
People buy, join forums and follow influencers just to be part of something bigger, something that, in a way, represents a break with the conventional economic system. In many cases, the value of a memecoin depends almost exclusively on the strength of its community, rather than on technical or economic fundamentals.
Given this growing trend, it is extremely important to remember that what is easy to win, is easy to lose. In an “easy money” market, investors are more likely to invest in these assets without proper risk assessment. However, these speculative assets face the risk of large declines.
Investors should remember that memecoins, while they can offer quick profits, can also lead to significant losses. Perhaps, buying memecoins could be equated more to a game of chance than to an informed investment. Just as there are many memecoins that rise in price, there are many that fall.
