Memecoins More Than a Punchline in Crypto Winter
Even more surprisingly, they have held their value quite well compared to many more serious altcoins and are even positioned to have their own utility-based ecosystems.
In a previous article, we explored why metaverse countries and NFTs could be a less risky portfolio than “safe” assets like ETH and BTC. Also, are people too quick to dismiss memecoins?
Here’s a closer look at what memecoins are and see why SHIB and DOGE may have more of a future than you think.
Memecoins after crash
Memecoins are digital assets that are based on popular internet memes. For example, the most famous meme coin is DOGE. Shiba is a spinoff based on a Shiba Inu dog. SHIB and DOGE are two of the most popular memecoins in the crypto world.
The top 15 coins by market cap are shown in the figure below from CoinMarketCap on July 24, 2022. As you can see, SHIB and DOGE are ranked 10 and 14 respectively.
Largest Market Cap (Coinmarketcap.com)
More importantly, we also have a month-by-month breakdown of DOGE’s and SHIB’s average position from January to July 2022 in the largest market capitalization rankings. It is noticeable that it retains its position within the top 15 as shown in the screenshot below
Footprint Analytics – Memecoins in the Bear Market 2022 (footprint.network)
From 1 January to 24 July, DOGE fell from approximately 24 billion to approximately 8 billion, and SHIB decreased from approximately 11 billion to approximately 5 billion. Both memecoins have held their own, unlike the previous cryptocrashes of 2018 and 2014 where a majority of cryptocurrencies would be wiped out forever.
In fact, both SHIB and DOGE did not suffer the highest price decline among the top 15 cryptos during this 2022 bear market. The diagram below shows the price development so far this year (YTD), up to 24 July 2022.
Footprint Analytics – Memes vs. Alt’s Token Price – Equal Spread
There are a few reasons for this year’s market crash that affected SHIB and DOGE. One main reason is that cryptocurrencies are highly correlated with Bitcoin in terms of price action. Also, Bitcoin has a four-year tendency to crash right after a massive price increase. 2022 is the year like 2018 and 2014, and is reinforced by a historic round of monetary tightening to reign in record high inflation.
On May 7, 2022, another major event in the crypto bear market took place with LUNA and its stablecoin UST falling. This crypto-current event sent shock waves to crypto investors and traders, as well as R&D fuel to naysayers and skeptics of the blockchain world. This incident caused Bitcoin to lose over 11% for the week, and the entire crypto market followed suit.
Basic analysis
Despite the negative news on the markets, fundamental indicators have flashed positive signs on both SHIB and DOGE
According to the latest analysis from CoinGecko.comthere has been a strong and growing community of DOGE investors for much of 2022. You can see that the number of Twitter followers and Reddit subscribers has grown steadily.
What’s fascinating is that memecoins are not only surviving the crypto winter, but their community is growing.
See the figure below.
We can also note the same for SHIB. The chart below from CoinGecko.com illustrates that despite the declining market, there is a strong growing community for SHIB.
Both Reddit and Twitter subscribers have surged for much of 2022. It’s also worth noting that SHIB is much younger than DOGE, as SHIB was founded in 2021.
Next, we can take a look at the number of SHIB wallets over three months. What is interesting is that the number of wallets for SHIB holders is increasing exponentially.
In April 2022, the number of wallet addresses was just under one million. If we fast forward to July 2022, we can clearly see that the number of wallet addresses reached 1.2 million, which is a growth of 200 thousand wallet addresses in three months.
The growing number of wallets is another indicator that SHIB remains a popular crypto asset among investors.
Current events for SHIB and DOGE
By definition, memecoins have intentions to be humorous, but the development of SHIB and DOGE has presented their use cases to the world. Here are some important events for SHIB and DOGE from 2022:
DOGE
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The Boring Company, owned by Elon Musk, announced it will take DOGE payments for its public subway transportation in Las Vegas.
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According to Coinbase, Dogecoin will also accepted as payment for the company’s trading solutions.
SHIB
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A leading developer announced at the beginning of July that Shiba Inu intends to issue stablecoin.
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For the Shiba card collection game and other platforms, Shiba is launching a new coin called $TREAT.
Conclusion
Both SHIB and DOGE have continued to hold value despite highly volatile conditions in crypto and have growing populations of users and holders.
Furthermore, current cases show that companies are still interested in collaborating with these memecoins. From the numbers to the data and the analysis, we can see that memecoins can become much more than a joke.
July 2022, Mike
Data source: Footprint Analytics
