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A new study has found that as many as 36% of all the cryptocurrency trades ever made have occurred within the last month. The most interesting part of the study, though, was that it found that 95% of those trades were for just two coins: Dogecoin and Pepe Cash. The reason for this is that, in the last few months, the Binance Smart Chain has been giving out a lot of free “meme coins” to anyone who trades in one of the top ten, most popular coins.
New trading pairs? Check. New coin listings? Check. New investor money? Check. The Binance exchange has been on fire recently, and it doesn’t look like the excitement is going to slow down any time soon. The exchange has recently added trading pairs for NEO and NEM, as well as new listings for a number of altcoins.
Binance is a relatively new cryptocurrency exchange that has quickly become one of the largest in the world. The platform has released a smart chain, which can be used by meme coins to issue their own coins and tokens.
This move has been criticized by some who say that it will fuel the meme coins craze and make life much harder for people who are trying to find good projects to invest in. However, supporters of Binance’s move say that it will ensure that the best projects will be recognized and will attract the most investors in the long run.
The promise of getting rich quick is never lost on cryptocurrency investors. The lack of bitcoin has hurt many people who could have done it. A $100 investment in bitcoin in 2010 would equate to over 333.33 BTC, which is a hard pill for many to swallow.
The cryptocurrency world is often a greed-driven frenzy, and coin memes seem similar to the ICO era of 2017. Recognition by institutional investors like PayPal and Tesla has normalized cryptocurrencies.
Binance Chain has created a more affordable barrier to entry for DeFi and dApps, changing Etheruem’s main problem in 2021 – high fees. According to Vanity Fair, meme currencies are a new way to use greed and fear to encourage users to buy into an empty project with bad fundamentals.
A mania fuelled by access
The summer of DeFi was the catalyst for the return of attention to cryptocurrencies around the world, as the global pandemic forced users to look for alternative sources of income. Automated market makers have encouraged peer-to-peer transfers without the need for a centralized structure. However, the promise of a decentralized and free market presented both opportunities and challenges.
According to Bscscan, Binance’s Smart Chain has surpassed Ethereum in terms of daily transactions: more than 7 million transactions versus 1.7 million at the time of writing. Binance Smart Chain is designed for fast exchanges and works in conjunction with Binance Chain, which has similarities to the Ethereum ecosystem. Low online transaction fees help DEXs like PancakeSwap become a magnet for investors. The absence of a centralized structure at DeFi and Binance creates an uncensored network to launch new projects.
According to reports from Vice, projects on Binance Smart Chain are easy to create and launch, allowing people to start small projects fueled only by marketing and empty promises.
Data on the new meta retailer shows that Generation Z will make up the majority of retailers by 2021. Only 16.9 percent of new generation Z investors understand the basics of cryptocurrencies and blockchain, the survey found. Fomo is an important catalyst for new investors entering the cryptocurrency market. The promise of getting rich quickdraws them to memes like Dogecoin or Shiba Inu.
The presence of Elon Musk as an influential figure in the cryptocurrency space has added a new dynamic to the perception of cryptocurrencies. Elon Musk, who is considered a reliable source, helped make Dogecoin look like a good investment, but a series of irresponsible tweets have made it less reliable.
Moreover, the damage to the crypto-currency market has already been done, and as some users have noted, the rise of meme-currencies is pushing the market into a new bear market. As Vanity Fair notes, the rise of memes is the sum of driving factors like greed, quick access to information, social media and influencers. Its ability to lure young investors with a cartoonish brand image paints a bleak picture of the cryptocurrency market.
Projects like SafeMoon and Shiba Inu made headlines after parabolic jumps, but investors are cautious about their sustainability. Psychologically, people crave a get-rich-quick scheme, and the endorsement of coin memes by influencers on social media removes the risk barrier in people’s perceptions.
The cryptocurrency market is the Wild West, and the first two Google searches support the idea that it hasn’t changed since 2017. Binance Smart Chain has provided faster and more accessible access to DeFi, but does not control the types of projects users spend on.
Moreover, any ecosystem that offers a lower barrier to entry, such as MATIC, experiences the same inflow of Meme Coins or PolyDoge. The increase in meme tokens on Binance’s Smart Chain is due to market demand from naive investors hoping to capture the new bitcoin.
As if the crypto market has not enough volatility already, a new trend has emerged that is taking it to a whole new level. This trend is the meme coin mania. The idea is quite simple really. In order to get attention for a new coin, you create a parody of another existing coin and release it under the same name. The old coin will get noticed and you will get free press for your new coin.
As long as your new coin has a cool enough name and a funny enough logo, you can reach the top 100 coins on the market cap within a week.
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