Memecoins More Than a Punchline in Crypto Winterbit2main
Even more surprisingly, they have held their value fairly well compared to many more serious altcoins and are even positioned to have their own utility-based ecosystems.
In a previous article, we explored why metaverse land and NFTs could be a less risky portfolio than “safe” assets like ETH and BTC. Are people also too quick to dismiss memecoins?
Here’s a closer look at what memecoins are and look at why SHIB and DOGE may have more of a future than you think.
Memecoins after the Crash
Memecoins are digital assets that are based on popular internet memes. For example, the most well-known meme coin is DOGE. Shiba is a spinoff based on a Shiba Inu dog. SHIB and DOGE are two of the most popular memecoins in the crypto world.
The top 15 coins by market capitalization are shown in the figure below from CoinMarketCap on July 24, 2022. As you can see, SHIB and DOGE are ranked 10 and 14, respectively.
Largest Market Capitalization (Coinmarketcap.com)
More importantly, we also have a month-to-month breakdown of DOGE’s and SHIB’s average position from Jan to July 2022 in rankings for largest market capitalization. It is noticeable that it maintains its position within the top 15 as shown in the screenshot below
Footprint Analytics – Memecoins in bear market 2022 (footprint.network)
From January 1 to July 24, DOGE dropped from about 24 billion to about 8 billion, and SHIB decreased from about 11 billion to about 5 billion. Both memecoins have held their ground, unlike the previous crypto crashes in 2018 and 2014 where a majority of cryptocurrencies would be wiped out forever.
In fact, both SHIB and DOGE did not suffer the highest price decrease among the top 15 cryptos during this 2022 bear market. The chart below shows the price performance of year to date (YTD), up to July 24, 2022.
Footprint Analytics – Memes Vs. Alts Token Price – Equal Spread
There are a few reasons for this year’s market crash that impacted SHIB and DOGE. One major reason is that cryptocurrencies are heavily correlated with Bitcoin in terms of price action. Moreover, Bitcoin has a four-year tendency to crash right after a massive increase in price. 2022 is that year like in 2018 and 2014, and is compounded by a historic round of monetary tightening to reign in record inflation.
On May 7, 2022, another major event of the crypto bear market took its course with LUNA and its stablecoin UST tumbling. This crypto current event sent shockwaves to crypto investors and traders as well as FUD fuel to naysayers and skeptics of the blockchain world. This event caused Bitcoin to lose over 11% for the week, with all of the crypto market following suit.
Despite the negative news on the markets, fundamental indicators have been flashing positive signs on both SHIB and DOGE
According to the latest analysis from CoinGecko.com, there has been a strong and growing community of DOGE investors for much of 2022. You can see that the count of Twitter followers and Reddit subscribers has been growing steadily.
What is fascinating is that memecoins are not only surviving the crypto winter, but their community is growing.
See the figure below.
We can note the same for SHIB also. The figure below from CoinGecko.com illustrates that despite the downward market, there is a strong expanding community for SHIB.
Both Reddit and Twitter subscriber counts have climbed for much of 2022. It is also worth noting that SHIB is much younger than DOGE, as SHIB was founded in 2021.
Next, we can take a look at the number of SHIB wallets over the course of three months. What is interesting is that the number of wallets for SHIB holders is increasing exponentially.
In April 2022, the number of wallet addresses was barely one million. If we fast forward to July 2022, we can clearly see that the number of wallet addresses touched 1.2 million, which is a growth of 200 thousand wallet addresses in a three month span.
The increasing number of wallets is another indicator that SHIB is still a popular crypto asset among investors.
Current Events for SHIB and DOGE
By definition, memecoins have the intention of being humorous, yet the evolution of SHIB and DOGE has presented their use cases to the world. Here are some significant events for SHIB and DOGE from 2022:
The Boring Company, owned by Elon Musk, announced it will take DOGE payments for its public underground transit in Las Vegas.
According to Coinbase, Dogecoin will also be accepted as payment for the company’s commerce solutions.
A lead developer announced in early July that Shiba Inu intends to release stablecoin.
For its Shiba card collecting game and other platforms, Shiba is launching a new coin called $TREAT.
Both SHIB and DOGE have continued to hold value despite highly volatile conditions in crypto and have expanding populations of users and holders.
Furthermore, current affairs demonstrate that businesses are still interested in collaborating with these memecoins. From the numbers of the data and analysis, we can see that memecoins could become much more than a joke.
July 2022, Mike
Data Source: Footprint Analytics