The survival crisis of 75% memecoins despite 22% rise

The rise of memecoins is an important milestone of the crypto community and Binance research credits increased the money supply for it. As investors have more appetite for high-risk assets, memecoins have tripled in value.

But, they are speculative and very reactive to influence. They have clocked a 22% surge on the back of the US election result.

75% memecoins were born last year

A recent Binance report revealed that the rising money supply has driven more investment into riskier crypto assets, including memecoins. Its market value has tripled relative to altcoins since 2022.

The report highlights that with regulators discouraging Initial Coin Offerings (ICOs), new crypto projects now rely on private venture capital (VC) funding. This approach, known as “Low Float, High FDV,” means only a few tokens are available for public trading while the total valuation is high. However, this setup can potentially leave regular traders at risk of being used as “exit liquidity” by early VC investors cashing out. This also pushes some traders to seek memecoins instead.

The Binance report notes that launches and transparent token supplies have led memecoins to attract investments. Notably, both altcoins and memecoins can rally communities around shared beliefs in their potential. But the report calls memecoins more accessible.

Contrary to their perceived accessibility, transparency, and fairness, influencer Leonidas has a different take on memecoin listing. According to the commentator, memcoins get listed on top-tier exchanges like Binance, based on the “Memecoin Industrial Complex.”

The Memecoin Industrial Complex 🧵

If you want to get your memecoin listed on @binance and other tier-1 exchanges this is what you are supposed to do:

1. Set aside supply for the team (10%)

2. Do a pitch deck style raise from VCs and whales who get early access (25% of the…

— Leonidas (@LeonidasNFT) November 5, 2024

According to him, memecoins secure listings on major exchanges by reserving large portions of their token supply for insiders—team members, venture capitalists, influencers, and exchange fees. He also argues that this setup leaves regular retail traders at a disadvantage with only 30% supply. Leonidas hints that this might leave room for centralized control and market manipulation. He believes that memecoins should be fully community-owned, transparent, and free from insider influence.

What is noteworthy is that over 75% of memecoins in the market were created within the last year. According to Binance Research, more than 3000 memecoins came into being in 2024. While their existence in the market has been quick, their survival has been hard. The report notes that around 97% of memecoins have “died.”

Memecoins rise 22% in 24 hours

Memecoins which are often dubbed accessible and community-driven, are also known to be speculative. The memecoin community was long betting on a meme supercycle that might have kickstarted with Bitcoin hitting a new all-time high. Despite the majority of the meme market being fairly new, it has quickly responded to positive market sentiments due to Donald Trump’s victory. With Trump winning the 47th US presidency, the top memecoin market cap at press time has surpassed $73 billion. It has recorded at least a 22% rise in valuation on Wednesday.

DOGE has spiked by 16% as per CoinGecko data while PEPE has recorded 12% gains in one day. WIF has clocked a 14% rise and POPCAT is up 24% along with almost all memecoins being on the rise. Contrarily, MAGA TRUMP memecoin has dipped by around 47% on the back of profit taken by traders.

However, in a market where 97% of memecoins have already “died,” their speculative appeal is unsustainable. But for traders, memecoins are a high-risk, high-return bet.