Meme tokens have surged around 9.47% on Thursday, nearly hitting the market cap of $66 billion. Dogecoin (DOGE), Pepe (PEPE), and Dogwifhat (WIF) are at the forefront of the price rally.
However, the meme coin rally raises questions about whether it’s the time to buy, sell, or hold these meme-inspired tokens.
Dogwifhat Surges 45% Due to Sphere Wif Hat Campaign
Following a quiet phase, speculation about the end of the meme coin craze has been disproven by their impressive comeback. Specifically, Dogwifhat (WIF) experienced a notable 45% increase on Thursday, reaching an all-time high of $3.45.
A successful crowdfunding campaign fueled this leap. It amassed over $700,000 to feature the token’s logo on the Las Vegas sphere, showcasing the collective power of the meme coin community.
The “Sphere Wif Hat” campaign started on March 10. It quickly captivated the crypto community, raising significant funds through the stablecoin USDC. The success led to a spike in WIF’s value, positioning it as the fourth largest meme coin with a $3.3 billion market cap.
Support came from major Solana ecosystem players, including Phantom Wallet, indicating a trend of using unique marketing strategies to boost meme coins’ profile and value.
Read more: 7 Hot Meme Coins and Altcoins that are Trending in 2024
However, not everyone views the meme coin market positively. In an investor note, Franklin Templeton pointed out that while meme coins can offer quick gains, they lack inherent value or utility. The firm highlighted their popularity stems from their viral nature, low entry barriers, and potential for rapid profits, albeit with significant volatility.
This perspective from Franklin Templeton highlights the speculative nature of these investments, urging caution among investors.
Dogecoin, the original meme coin and now the tenth-largest cryptocurrency, continues to be a significant player. Its price recently surged by 10% after Elon Musk suggested that Tesla might accept DOGE payments. This incident highlights the impact of celebrity endorsements on memecoin prices.
Analyst Expresses Concerns
Yet, the enthusiasm for meme coins has stirred concerns about market stability. Trading volumes have soared to levels last seen just before the 2021 crypto bubble burst. Some experts worry that the market might be reaching a peak.
“Historically, a surge in meme tokens has often signalled a market top. However, it is difficult to predict whether this will continue to be the case now as new capital is entering the crypto markets. We also observe that some of these tokens are increasingly driven by idiosyncratic factors and are less correlated with Bitcoin,” Dessislava Aubert, research analyst at Kaiko, said.
Even the Dogwifhat Sphere campaign has led some to speculate that such high-profile stunts could overheat the market, potentially leading to a downturn.
Read more: Top 10 Cheapest Cryptocurrencies to Invest in March 2024
As the debate continues, investors face a complex decision on buying, selling, or holding meme coins. While the opportunity for quick gains is tempting, the risks associated with investments driven by social media trends cannot be ignored.
The unpredictability of the meme token market, where sentiment and viral campaigns heavily influence prices, adds another layer of complexity.
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