Crypto Investors Juggle Bitcoin Stability and Meme Coin Risks Amid Market Short-Termism

Currently, crypto investors are pouring attention and capital into two extremes of the market: Bitcoin and meme coins. One represents a trusted store of value, while the other embodies “high risk, high return.”

This is characteristic of the barbell strategy. Industry experts cite two main reasons for this trend: first, short-termism, and second, the influence of social media.

Short-termism is Distorting the Crypto Market

In a recent analysis, Ryan Watkins, Co-founder of Syncracy Capital, illustrated the performance of meme coin investments using data from the platform Pump.fun.

The data reveals that only 2 out of 2.44 million tokens created on this platform reached a market cap of $500 million. Only 3.1% of wallets achieved $1,000 in profit, with even lower rates for higher profit thresholds. Despite these statistics, the platform continues to launch over 248,000 tokens monthly, generating over $16.3 million in monthly revenue.

Read more: 7 Hot Meme Coins and Altcoins that are Trending in 2024

Pump.fun by The Numbers. Source: Syncracy

Watkins describes investors’ focus on meme coins as a “speed trap,” with short-termism dominating the market.

“The phenomenon isn’t surprising as it mirrors a broader shift in the global economy towards on-demand goods and services. Just as consumers expect rapid delivery of food to their doorstep, retail investors now expect immediate returns on their mobile trading apps…few market participants can see beyond even two weeks, let alone two months or two years. For many, trading has subtly become a mere facade for gambling.” – Ryan Watkins commented.

He also notes that today’s market mirrors the internet boom of the late 1990s. Bitcoin appears to have surpassed its unstable phase and is on a path to global acceptance as digital gold. However, the rest of the market is once again experiencing a speculative surge similar to the late 1990s.

Social Media Influence is Shifting the Market

Ryan also mentioned that token valuation is now entirely driven by mass attention. Ki Young Ju, CEO of CryptoQuant, attributes the current meme coin boom to social media’s transition from a focus on family and friends to interests. He predicts that an altcoin season will follow as social media shifts toward economic interests.

“Social media has evolved from being centered on relationships with friends and family to focusing on shared interests. The next step is social media driven by economic interests, which was the vision of Web3. Memecoins are just a temporary alignment of economic and shared interests in this transitional phase of social media. Soon, we’ll see an era where economic interests are aligned with the creation of social value on the internet, and that’s when the true altcoin season will begin.” – Ki Young Ju commented.

Read more: 11 Cryptos To Add To Your Portfolio Before Altcoin Season

Community discussions still center primarily around Bitcoin and meme coins. Topics about Bitcoin and meme coins always have a large mind share in community discussions.

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