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Memecoins surge to $16B while NFTs face liquidity crisis

Memecoins surge to $16B while NFTs face liquidity crisis

GrafaGrafa2024/10/22 07:35
By:Isaac Francis

Memecoins have surged in popularity, with trading volumes increasing fivefold to reach $16 billion, drawing significant attention from retail investors. 

While Bitcoin and other major cryptocurrencies continue to rise steadily, retail interest has predominantly shifted towards memecoins, which have outpaced altcoins in 2024. 

Alvin Kan, Operations Director of Bitget Wallet, noted that the increased interest in memecoins has negatively impacted the non-fungible token (NFT) market. 

According to Kan, the NFT market has been struggling since early 2023 due to a significant liquidity crisis, particularly affecting projects led by major players like Yuga Labs. 

He added, “The NFT market is currently facing a serious stagnation. Many projects are trying to attract users by developing new strategies. The NFT sector must regain its momentum.” 

Data from Kaiko reveals that memecoins’ market share has risen from 7% in 2023 to around 25-30% in 2024. 

This rise is attributed to the perception of memecoins as more transparent and fairer than venture capital-backed tokens, thanks to their fully circulating supplies, which lead to organic price formations. 

Despite the challenges, there is some optimism for the NFT sector. 

Speculation about a potential revival has surfaced with the recent launch of Yuga Labs’ ApeChain blockchain, which has led to a 100% increase in the value of APE coin. 

However, experts caution that the NFT market still requires innovative strategies to overcome the ongoing liquidity crisis. 

In contrast to the struggling NFT market, memecoins have gained a strong foothold in the altcoin space. 

Their continued popularity suggests a shift in investor sentiment and focus, as trading volumes reach $16 billion, while the NFT market searches for ways to regain its footing.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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