Andrew Kang of Mechanism Capital, a cryptocurrency venture capital fund, believes that meme coins have evolved and should not be considered sleazy. IN post on X Kang argues that meme coins are no longer a “last resort” investment, but an emerging sector that continues to attract millions of investors.
Should investors change their strategy?
The analyst believes that the most popular meme coins such as BONK, HONK and others may become the reason for the next market growth. For this reason, and given the potential of meme coins, investors, the analyst said, should consider adjusting their strategies or risk “dying.”
Another observer on X confirmed this observation. In response to the post, the analyst said that meme coins have been driving the market for months. The prices of the most popular meme coins such as PEPE and others from the Solana and Ethereum layer 2 platforms have increased.
The fact that meme coin prices are defying gravity and cryptocurrencies are rising at the same time suggests that they are no longer reliable indicators for marking highs.
In the past, whenever there was a key rally in meme coin prices, most analysts interpreted the move as a signal that the cryptocurrency rally might be ending.
However, this is changing quickly. The analyst stated that meme coins are resilient in this cycle and that there is unconventional altcoin rotation, which means that the landscape is changing.
Memes are burning: traders rake in millions from PEPE, WIF
While there are doubts about the durability of meme coins given that they are mostly devoid of utility and are speculative in nature, the top tokens, especially PEPE, outperform Bitcoin and Ethereum. Recently, PEPE has skyrocketed to modern all-time highs, printing modern crypto millionaires.
Lookonchain data shows that after purchasing 6.1M WIF for $5,879 in December 2023, one trader now holds $23.7M of the coin. With this turnaround, the trader saw an impressive ROI of 1197x.
The trader is not the only one. Another recently sold all of his shares in WIF for SOL worth $2 million. Lookonchain data notes that the entrepreneur he also profited from BONK and Boden.
Platforms also realize the importance of tokens such as BONK and HONK. Because they are speculative in nature and do not require complicated action plans, they attract modern investors interested in exploring cryptocurrencies and the many platforms in the space.
Aware of the potential of this industry, the Avalanche Foundation recently launched the Memecoin Rush program. Accompanying their announcement, Eric Kang, BD manager at Ava Labs, he said Meme coins “have become a cornerstone of Web3, representing the uniqueness and interests of diverse crypto communities.”
Feature image from Canva, chart from TradingView
