Altcoins are having a tough time, partly due to the emergence of memecoins that are capturing a significant portion of crypto investments. According to James Check, principal analyst at Glassnode, these memecoins are acting as a “silent killer” by siphoning off crucial funds. Which is putting a damper on the altcoin season.
Memecoins: An obstacle for crypto altcoins?
In a recent Rough Consensus podcastJames Check sheds light on the negative impact of memecoins on the performance of altcoins. According to him, crypto traders are flocking to popular memecoins such as Dogecoin, Shib Inu, and PePe. This is attracting a large amount of capital.
“For every dollar invested in memecoins, about 50 to 60 cents could have been allocated to major altcoins like Ethereum, Solana, and XRP,” he supports in the podcast. This diversion of funds creates a deficit for altcoins, slowing their progress in the crypto market.
The Meteoric Rise of Crypto Memes: A Threat to Altcoins?
Traditionally, memecoins gained popularity towards the end of crypto market bull runs. In 2024, however, the rise of these crypto assets has started much earlier. Which disrupted the evolution of altcoins.
Example :
The huge success of PEPE has seen traders make colossal gains. One such example is this crypto investor who turned $3,000 into $46 million.
This situation illustrates the diversion of capital that could have propelled altcoins, but which is now channeled towards these trendy cryptocurrencies.
Despite the current environment, some crypto experts are predicting a rebound in altcoins once the memecoin craze dies down. Current low trading volumes and prices could signal an opportunity for these cryptocurrencies to regain ground. According to these experts, altcoins could even outperform if capital starts to flow back to them. More to come…
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