Experts have revealed the reason for the success of “meme” cryptocurrencies. The rise in the price of such tokens is explained by the stagnation in the sector of serious cryptocurrencies and the love of traders for risky trading, writes RBC.
In early October, the value of several currencies at once, created on the basis of the popular meme with the Shiba Inu dog, has grown exponentially. Among them, the leader is the Shiba Inu token, which has already entered the twenty largest currencies in the world in terms of capitalization – in seven days the growth was 324 percent. It is followed by altcoins Akita Inu (274 percent) and Dogelon Mars (190 percent). A sharp rise in the price of meme tokens was caused by the publication of the head of Tesla Elon Musk in Twitter with a photo of your puppy. “Such tweets from Musk have repeatedly provoked surges in traders’ interest in certain cryptocurrencies,” said Nikita Soshnikov, director of the Alfacash crypto exchange. However, there are other reasons for the explosive growth in popularity of “meme” currencies, he added.
According to the expert, interest in such tokens is growing during periods of stagnation and calm in the sector of larger and more stable cryptocurrencies, such as bitcoin. The world’s first cryptocurrency gradually grew in value and over time became less prone to volatility. However, traders wanted to trade more actively and get more “quick” income, Soshnikov is sure. “Memorial cryptocurrencies provide an opportunity to enjoy risky trading, the pleasure of such trading is much like gambling or roller coasters, and it is definitely fun for the amateur,” he explained.
Co-founder of the ENCRY platform specializing in decentralized finance, Roman Nekrasov shares this view. In his opinion, speculation on meme-tokens is “a very gambling and exciting game”, which, moreover, gives a chance to increase your assets. Such a swing attracts traders. At the same time, Nekrasov noted that it is definitely not worth investing all your savings in such cryptoassets.
Great caution should be exercised when trading “meme” currencies because their prospects are almost impossible to predict. “Cryptocurrency memes are a great demonstration that an asset is valuable solely because it has value in the eyes of market participants,” Nekrasov said. As Vladimir Smetanin, CEO of the Swiss financial company Newcent, explains, the excitement about any meme token can be caused by the most unpredictable and unobvious factors, for example, statements by media people. The popularity of such cryptocurrencies is disappearing as quickly as it appears.
However, the actions of several large cryptocurrency holders can “shake” the course of any cryptocurrency. Bitcoin recently rose to $ 55.5k for the first time since May 2021. The CEO of the analytical company CryptoQuant Ki Yong Joo explained the rise in the price of the token by the actions of the “whales” – unknown people bought bitcoins for $ 1.6 billion in five minutes.
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