The memecoin are experiencing a good period in the crypto markets, but in these cases, it is always necessary to be very careful.
In fact, not only are they high-risk speculations, but often their market performance is due to actual pump&dump schemes that always end with a crash.
Summary
The memecoin of the moment
The memecoin of the moment by definition is DOGE of Dogecoin.
However, for Dogecoin it is now necessary to make a different reasoning, which is better to do at a later time.
Among the true “classic” memecoins, this is the moment of Bonk.
Bonk is a memecoin on Solana that often performs well at the end of the year thanks to token burns. This time the BONK DAO has announced a plan that includes the burn of one million tokens thanks to a community-driven campaign.
The crypto markets have reacted with a -98% in the last seven days for the price of Bonk, which brings the gain since the beginning of the year to +285%.
PEPE is also performing well, the third largest memecoin in the world by market capitalization behind Dogecoin and Shiba Inu (Bonk is the fourth).
PEPE is at +73% in the last seven days, and at +100% in the last thirty. In this case, however, the sensational thing is the +1,500$ since the beginning of the year, which suggests the presence of a speculative bubble that could also burst.
Both the price of Bonk and that of PEPE are not far from their all-time highs.
The memecoin with the greatest gain
Among the main memecoins, however, the one that is recording the greatest gains is PNUT, that is, Peanut the Squirrel.
However, it is a token that was just launched at the beginning of the month, which has accumulated an incredible +2,900% since it was launched two weeks ago.
The maximum peak seems to have already occurred last Thursday, at almost $2.5, and after such a performance, it is normal for there to have been a 34% decline.
In these cases, it is very difficult to imagine what it might do from now on, but having already reached a market capitalization of 1.6 billion dollars, its speculative bubble might also be on the verge of bursting.
The bull on memecoin
It should be remembered that, apart from Dogecoin, memecoins do not have real fundamentals, since their market value is supported only by the community.
These are totally speculative crypto assets, whose potential growth is due solely to speculation.
This on one hand means that if their price rises very easily, it then crashes, but it also means that it is not certain that after the crash it will not be able to recover again.
For example, Bonk was created in the middle of last year, and it is already in its fourth speculative bubble. Moreover, the all-time high was reached yesterday because all four bubbles have marked rising highs.
In these cases, it is extremely difficult to say when and where they will stop, even though generally the good period of a memecoin lasts only one four-year cycle of the crypto markets.
The price of Dogecoin (DOGE)
Dogecoin, on the other hand, is now an exception.
It was absolutely the first memecoin to be launched on the crypto markets, even 11 years ago.
Until 2020, it had never recorded stellar performances, but when Elon Musk started promoting it, it made a splash.
Its price between 2020 and 2021 went from 0.2 to 73 cents of a dollar, with a sensational +36,000% in less than a year.
That too, however, was a speculative bubble, although supported by an apparent project by Elon Musk regarding it, so much so that it burst in 2022, bringing the price below 6 cents of a dollar at the end of last year.
With Trump’s victory, and the launch of the Department Of Government Efficiency (DOGE) by Elon Musk, it has regained momentum, even though the peak of 43 cents reached last week is still significantly lower than that of 2021.
However, if Elon Musk’s DOGE project were to succeed, it is possible that the world’s leading memecoin could end up significantly surpassing the highs of three and a half years ago.
Attention to the memecoin effect
Aside from Dogecoin, memecoins tend to follow a trend in the crypto markets characterized by pump followed by dump.
As mentioned before, it is pure speculation, without solid fundamental bases.
This means that it is not so difficult to make the price rise a lot and very quickly, especially when they still have low market capitalizations. However, it also means that such rises are fundamentally based on nothing, and therefore sooner or later they are followed by declines.
However, when a speculative bubble bursts on a memecoin, it is not at all certain that the memecoin will no longer have the possibility of recovering in the future on the crypto markets. It should be added, however, that not many have survived the bursts of large bubbles.
This leads to not considering memecoins as good investment assets, except for very rare exceptions that are still to be proven, while they can give rise to real opportunities to be exploited but only if you manage to buy them at a really low price.
In fact, once the price has risen, if this has happened due to a bubble, there is a serious risk that the latter will burst, generating the classic bull and bear pattern of pump&dump.
