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Is the meme coin mania back to crypto?

source-logo  finbold.com 14 May 2024 13:43, UTC

Meme coins are trending in the cryptocurrency market after a month of low activity. Renewed interest surged when the famous meme trader Keith Gill returned to social platforms on May 13. Gill, known as Roaring Kitty, inspired the GameStop (NYSE: GME) short squeeze in 2021 and a following Dogecoin (DOGE) pump.

Data from Santiment’s SanBase Pro, Vinicius Barbosa, for Finbold on May 14 shows a recent meme coin trend taking shape. In particular, PEPE leads the charge among today’s trending coins, followed by FLOKI, DOGE, Shiba Inu (SHIB), and dogwifhat (WIF).

Notably, the Ethereum-based meme token of Pepe The Frog has surged over 21% in the last 24 hours at $0.000011. It is a similar level reached in early March due to a massive meme coin boom. Moreover, PEPE’s social dominance (bars) has jumped to record highs of 2.46% of the market’s overall social interest.

Other meme coins have not followed PEPE’s price action yet. However, as these coins trend in social indicators, traders wonder if the meme coin mania is back to cryptocurrency trading.

Roaring Kitty’s return: GameStop and meme coin mania

Roaring Kitty, a pseudonymous for Keith Gill, reactivated his X (formerly Twitter) account after three years of idle. Sided with its last post from June 18, 2021, the account’s timeline shows the meme of a ‘gamer’ taking an active position to start playing on May 12.

In this context, it is worth the warning that trading meme coins or meme stocks can be extremely risky. The risk of ruin with this asset class is high.

Furthermore, experts warn of “The Greater Fool” theory dynamics that resemble financial bubbles, when the “mania” disappears and the late buyers remain with massive losses of assets that have no organic demand besides the highly speculative nature of traders trying to outplay the market, but being outplayed as soon as the “music stops.”

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.