It's Over? Meme Coins Like Shiba Inu (SHIB) and DOGE Eye Dramatic Dominance Drop

Thu, 06/20/2024 - 10:20
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Ki Young Ju, founder and CEO of CryptoQuant, highlighted a significant shift on the market. According to Ju, the dominance of meme coins on the altcoin market is waning, suggesting a transition from speculative gambling to a more fundamentally driven approach reminiscent of earlier market phases.

This shift could mark the end of the meme coin craze that has gripped investors for the past few months.

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Ju clarified that his bearish stance is specific to meme coins, not Bitcoin. He remains long-term bullish on BTC, suggesting that while the hype around meme coins may be fading, fundamental assets like Bitcoin continue to hold strong investment potential. This distinction is crucial, as it indicates broader market sentiment that seeks intrinsic value over speculative ventures.

It can be argued that meme coins act as leveraged plays on their parent chains. For example, tokens such as WIF and BONK are linked to Solana (SOL), while Shiba Inu (SHIB) and PEPE are linked to Ethereum (ETH). Such assets often experience volatile price movements that reflect broader market trends, but with amplified effects.

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However, the flow of capital into financial markets typically sees funds move from less risky assets to more speculative ones. This cycle often leads to inflated valuations for meme coins, followed by significant capital withdrawals, causing market-wide downturns.

The decline of meme coins' dominance may signal the maturation of the market, where investors are beginning to prioritize assets with strong fundamentals over high-risk, high-reward plays.