WTF is right with memecoins?

Memecoins are the new hot trend in crypto with combined over $50b in market cap.

Infact, recently Tesla added DOGE coin which is one of the biggest memecoins by market cap as one of the payment methods. Elon has been flirting around with idea of using a cryptocurrency for payments since 2020 and now they are looking to move forward with this.

Doge was created way back in 2013 as a joke by two engineers forking an open source blockchain code, to be used as a payments system back in the day when anything and everything existed in the crypto world and speculation was wild. This meme then eventually started being adopted by a community of followers who believed or tended to keep the joke going, and then in the bull market of 2021 this joke reached a market cap of $85b (YES, NO JOKE 😛 )

Suddenly there was a community that formed around this tokenised version of a meme, there was a culture created (the OGs who bought it in 2013) and today it sits over $20b of market cap with millions of addresses holding it and now Tesla integrating it as a payment alternate

So why did this happen?

If you think of it, memecoins are basically just memes, that start from the internet culture, because they are funny and make you laugh. You tend to share these memes around with your friends, make more relatable memes and have a good time online. But deep down what is happening is that these memes take away a share of our attention, right?

An adult on an average has 5-6 hours of screen time out which they spend majority of their time on social media platforms, and memes… well they are all over these platforms, infact one of the ways people communicate or talk about existing culture and what crypto did was tokenize these memes and attach a certain value to it, so that it can be held, traded or speculated upon. And THIS HAS BEEN A GAME CHANGER

In reality 99% of these memecoins have no fundamentals. But this huge market cap tells us a couple of things as to why this market keeps growing:

1. People love speculation, as we see the similar trend with the rise of fantasy sports platforms like Dream11. Now one can say that there is an element of skill but we all know most people are on it to get a chance to win a low probability outcome of making 1 crore in a single go

2. Culture and community are difficult to value in this digital age but eventually going to mean a lot in the future, on top that, your attention that these memes catch do have some value that cannot be measured, right?

I mean one way to think of it is: Value = your hourly rate*time spent passing on memes which does give it some intrinsic value but this is a discussion for another day.

Till then, hold on to your dear assets

The global cryptocurrency market cap today: $2.47 Trillion

Daily change: -1.40% | Yearly change: 99.70% 

Bitcoin (BTC) is the largest cryptocurrency with a market cap of $1,225 Billion.

Weekly change: 0.38% | YTD change: 50.43%

Another important metric is Bitcoin dominance which can be used as a rough indicator of the relative strength of Bitcoin versus other cryptocurrencies.

Historically, Bitcoin leads the rest of the crypto market off the cycle lows and into the next bull market. BTC dominance increases early in cycles and decreases later as the wealth effect sets in and long-term holders rotate into altcoins for more upside.

Bitcoin dominance: Current Year: 53.52% | Last year (May 2023): 46.26%

The market sentiment has been down for few weeks now as there was a broader correction with Bitcoin sell off before the halving

Note: The data used is based on metrics like Volatility, Surveys, Bitcoin Dominance, Social and Google Trends. Source: Coinstats

Let's have a look at Ethereum supply changes post its merge to a PoS blockchain from PoW.

The significance of the chart - understand how the supply of Ethereum is decreasing post the merge, which means “deflationary economics” for the Blockchain. Long term gives a sense of where the supply is headed

Its almost half a million ETH that has been burned.

Supply change since merge POS -424,169 ETH

The graph highlights POS issuance since the merge. Impressive numbers, look super bullish for ETH long term given the supply of ETH is not growing as before

Fidelity Reveals Pension Funds Are Exploring Crypto The exploration is still in its very early stages, said Fidelity’s VP of Digital Assets.

AI-Agents Will Do Crypto Transactions’: Arif Khan on the Future of Crypto-AI Alethea CEO Arif Khan, a speaker on the AI Stage at Consensus 2024, says we’ll soon be automating large parts of lives including paying bills and responding to emails.

I enjoyed reading this one, quite informative

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research