Bubble or new era of expansion?
Memecoins have emerged as one of the most surprising asset classes in the cryptocurrency market in 2024, with a performance that is the envy of other categories. Currently, the market capitalization of memecoins surpasses the impressive $58 billion mark, which raises an important question: are we about to enter a memecoin supercycle, or is the sector headed for a major correction?
This scenario has divided analysts and investors. On the one hand, there are signs of continued growth, supported by Google Trends datawhich show that search interest in memecoins remained consistently high, ranging from 75 to 100 points throughout October. On the other hand, some warn that this boom could resemble previous speculative bubbles in the crypto market, which could lead to a sharp correction.
What defines the memecoin supercycle?
The term “supercycle” refers to a period of prolonged and accelerated growth of an asset, which goes beyond traditional bull cycles. In the case of memecoins, the supercycle is characterized by increasing adoption by new investors and the development of increasingly innovative projects, such as the recent Pepe Unchainedwhich aims to create a layer 2 blockchain dedicated exclusively to this asset class.
What differentiates memecoins from other more traditional cryptocurrencies, such as Bitcoin or Ethereum, is the fact that their value is much more linked to popularity and community engagement than to technical fundamentals.
Projects such as Dogecoin (DOGE) and Shiba Inu (SHIB), the most popular memecoins to date, have accumulated a solid base of users who invest not only for technology, but for cultural and emotional reasons, which further fuels speculation.
Comparing the current cycle with previous bubbles
To understand whether the current bull cycle in memecoins is sustainable, it is worth comparing it with previous bubbles in the cryptocurrency market. The ICO (Initial Coin Offerings) bubble in 2017, for example, saw an uncontrolled growth of new tokens that, at the time, promised to revolutionize several sectors, but ended up facing a severe correction when many projects failed to deliver what they promised.
Another clear example is the Bitcoin boom in 2013, when its price rose rapidly, followed by a sharp drop of almost 80% the following year. Although Bitcoin recovered and continued its growth trajectory throughout the decade, many early investors were severely impacted by market volatility.
Today, memecoins may be at a similar point. Just like in previous bubbles, many new projects are emerging with grandiose promises, while investor interest continues to grow. However, analysts point to an important factor: the lack of solid fundamentals that support the value of these currencies in the long term.
Risks and opportunities in the memecoin market
The current memecoin supercycle could present significant opportunities for investors seeking high returns, especially those who got in early on popular projects. However, the risks associated with this type of investment are equally high.
One of the main concerns is that the memecoin market relies heavily on social engagement and hype. This means that an abrupt change in investor sentiment, whether due to negative news or a broader correction in the cryptocurrency market, could result in a drastic drop in the prices of these coins.
Additionally, government regulations may pose an additional risk. In several countries, the cryptocurrency sector is under increasing scrutiny from authorities, and new regulations could limit growth or even stifle some of these assets.
On the other hand, the memecoin market has shown an impressive ability to reinvent itself. The case of Shiba Inu (SHIB), which started as a mere imitation of Dogecoin and is now positioned as a complete ecosystem, with decentralized exchange (DEX) and staking features, is a clear example of how some of these projects are evolving.
Additionally, the Pepe Unchained ($PEPU) project aims to create a dedicated blockchain infrastructure for memecoins, with a proposed 100x speed and lower transaction costs than the Ethereum mainnet. This could attract even more developers and investors, potentially prolonging the bull cycle.
Historical patterns in memecoin performance
The history of memecoins is recent, but it already reveals some patterns. During the 2021 cryptocurrency bull market cycle, Dogecoin and Shiba Inu saw meteoric rises, with DOGE reaching a valuation of over 12,000% in the period. However, these gains were followed by a significant correction in 2022 when market volatility increased.
Since then, memecoins have recovered and are once again in the spotlight. What's different now is that, unlike previous cycles, investors seem more aware of the risks. Furthermore, in many cases, they are diversifying their bets into new projects, such as Floki Inu (FLOKI) and Pepe Unchained.
A new supercycle or heading towards a correction?
Although memecoins are attracting new investors and generating great excitement, it is important to recognize that the market is still highly speculative. Growing interest and the emergence of innovative projects like Pepe Unchained suggest that the memecoin supercycle may have room to continue.
However, as with any bull market, investors should be aware of warning signs of a potential bubble and changes in market sentiment.
In the end, the memecoin supercycle could either create a new era of expansion in the crypto market or turn into an abrupt correction for those who do not know how to manage risks.
Pepe Unchained: Layer 2 project approaches US$ 20 million in pre-sale
Pepe Unchained is about to become the first Pepe themed memecoin with its own blockchain. The project is raising funds to build a layer 2 blockchain based on Ethereum. Promising to be 100 times faster and significantly cheaper than the Ethereum mainnet.
The project's central proposal is to create a dedicated platform for memecoins and related applications within the Ethereum ecosystem. Offering an integrated solution for this growing niche. The new “Pepe Chain” will come equipped with all the features of an advanced blockchain. Including a block explorer, a dedicated Ethereum bridge, a decentralized exchange (DEX) and staking features. Consolidating its position as a robust infrastructure for memecoin enthusiasts.
The project is already generating great expectation and interest in the crypto community
In addition to the innovative concept, the Pepe Unchained team has kept excitement high with a series of announcements that strengthen investor confidence. Among the new developments, negotiations with level 1 exchanges and the launch of a subsidy program stand out. Which will encourage developers to build on the Pepe Chain ecosystem by offering financial support for new projects.
Given the project's growth, the pre-sale raise of more than US$19 million is not surprising, and analysts have shown great support. Furthermore, the project has already attracted the attention of experts, who see great potential in the development of thematic blockchain.
The current price of Pepe Unchained pre-order is $0.00998, but is set to rise as the campaign progresses. Creating a sense of urgency among investors interested in getting in early. To participate in the pre-sale, simply access the official website and purchase $PEPU with ETH, USD, BNB Coin, PEPE or make the purchase with a credit card.
With a bold vision and a dedicated team, Pepe Unchained is paving the way for a new chapter in the memecoin space.
Disclaimer: This article is for informational purposes only, and does not constitute investment advice or an offer to invest. CriptoFácil is not responsible for any content, products or services mentioned in this article.