Meme coins as a phenomenon have seen dramatic growth in this area this year, with 75% of all projects launching in 2024. Binance Research has released an exclusive report analyzing this market trend.
The report takes a skeptical view of meme coins’ capacity for innovation, but recognizes their broad appeal and ability to foster community.
2024: Year of Meme Coins
Binance Research has released a new report on the crypto industry, shared exclusively with BeInCrypto. Relying on his existing experience in analyzing growth sectors In space, analysts conducted an in-depth study on meme coins. Although meme coins have been around for a decade, starting with Dogecoin, their popularity has increased significantly in 2024.
Learn more: What are Meme Coins?
Essentially, according to this report’s estimates, meme coins are primarily the product of broader economic trends. Binance Research looked at several space-specific factors, but kept coming back to statistics like global money supply and inflation prices. Above all, these assets exist in a climate of increasing precariousness, and many users hope to cash out quickly.
“In many ways, meme coins attempt to embody the fundamental principles of the cryptocurrency industry: fairness, transparency, decentralization. In another way, they reveal a different side of the industry, demonstrating a distinct priority of financial profit and a lesser focus on technological progress,” the study states.
Generally, meme coins have a reputation for high risk and huge gains in the short term. Qualified blockchain developers have little incentive to join most projects; thus, the majority of these pieces do not innovate in any significant way. The rate of new tokens has increased astronomically and 97% of them fail. Additionally, the same coins are a common vector for pump and dump systems.
Nevertheless, these projects have a unique appeal despite their drawbacks. Binance Research sums up this call in one word: community. Meme coins generally have a lower barrier to entry than other token projects and grow quickly through word of mouth. Novice investors can join meme coin projects as soon as they are created and feel a sense of participation and enthusiasm.
Learn more: 7 Hot Meme Coins and Altcoins Trending in 2024
Ultimately, however, the report falls on the side of coin skepticism. He questions whether their rise is caused by a feeling of “financial nihilism” among younger generations, saying meme coins “will inevitably lead to inefficiencies.” Yet in this industry of sophisticated technical ideas, it is important to provide stories of belonging to inexperienced users.
“Valuable insights can be gleaned from the meme coin phenomenon, particularly in the areas of community development and the launch of fair tokens. The rise of meme coins is a compelling demonstration of blockchain technology’s ability to unite individuals on a global scale and foster organic communities around tokenized assets,” the report concludes.
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