Meme coins represent a crucial pillar of the cryptocurrency ecosystem. Although their utility is limited more often than not, there is a growing demand for exposure to assets like Dogecoin (DOGE), Shiba Inu (SHIB), and others. As these currencies renew their bullish market trend, they may yield some unusual price changes in the coming weeks and months.
Meme Coins Hold Significant Value
Most onlookers and cryptocurrency enthusiasts will acknowledge meme coins have their place in the broader industry. Dogecoin set an exciting example by creating a more accessible cryptocurrency that anyone could easily mine, even if it did not serve any immediate purpose. However, the growth of its community allowed DOGE to become a payment method and gain support from companies like BitPay, among others.
Today, the meme coins represent a combined market cap of over $32 billion. That is a significant amount, even if the overall valuations differ greatly. Moreover, Dogecoin and Shiba Inu set fresh all-time highs in the second half of 2021, generating much media attention for various reasons.
Additionally, there are now dozens of meme coins, all of which try to captivate a bigger audience. The rise of Shiba Inu in the industry has given it the global $14 market cap by market valuation, just behind Dogecoin. Other projects, like BabyDoge, Dogelon Mars, Kishu Inu, CATE, and others, are building momentum, but their market capitalizations remain near or below $500 million.
Market Momentum Shows Promise
One would expect the meme coins to struggle in the price department when Bitcoin and Ethereum remain primarily bearish in 2022. However, assets like Dogecoin, Hoge Finance, DogeBonk, and others have shown some positive momentum despite these overarching market conditions.
In the past week, Catbonk and Kawakami—two meme coins with a market cap below $500,000—have noted a 787% and 441% price gain, respectively. It is not uncommon for smaller-cap meme coins to note such strong momentum with little trading volume, yet it still creates money-making opportunities for traders with a risk appetite.
The higher market cap meme coins, including Dogecoin and Shiba Inu, noted small gains for the week but nothing too spectacular. Dogecoin yields a 3.1% increase for the week, with Shiba Inu performing slightly better at 4.8%. Although those improvements are significant, it seems there is still a degree of accumulation where meme coins are considered.
What Comes Next For Meme Coins?
With so many established meme coins, it would seem there is no further room for competition. However, that is not the case, as there is still room for innovation and revolutionizing the industry Mainstream and institutional interest in cryptocurrencies has risen strongly, creating new opportunities and demand.
One crucial aspect of meme coins is how they attempt to provide a faster and cheaper alternative to Bitcoin or Ethereum. While Dogecoin and Shiba Inu are cheaper, their transaction times can still take up to 40 minutes. Additionally, users can see higher fees of up to $30, negating the benefits these currencies were designed to provide.
Finding a solution to both problems can give future meme coins a competitive advantage. For example, networks like Vite—powering Vita Inu—use a Directed Acyclic Graph (DAG) architecture rather than a traditional blockchain. A DAG processes more transactions simultaneously—almost instantaneously—and removes the need for transaction fees.
Meme coins can serve as daily payment methods, assuming their infrastructure enables such adoption. No transaction fee and near-instant transactions make cryptocurrencies peer-to-peer cash, as Satoshi Nakamoto initially envisioned for Bitcoin.
Ongoing Ecosystem Growth Is Crucial
With such prominent technology available to meme coin developers, it becomes possible to expand the ecosystem. A short-term approach is to issue a new token and hope people will use it for payments. However, it does little or nothing for the long-term approach and brings no value to the project.
As Shiba Inu illustrates, exploring decentralized finance opportunities and NFTs is a viable approach. The ShibaSwap platform lets users exchange currencies, stake assets, provide liquidity, and more.
Its trading volume tops $7 million per day, with four trading pairs generating over $1 million per day. That may not seem like much compared to centralized or decentralized exchanges, but it creates a precedent for other meme coins to follow and expand upon.
An infrastructure based on DAG can help developers explore more use cases in decentralized finance, NFTs, or anything else. There is no limit to what can be achieved with high throughput, fast settlement, and non-existing fees. Moreover, it would help meme coins shake off the label of "money grabs" and "shitcoins" by offering real-world utility.