TL;DR
- A report from Binance Research reveals that 97% of memecoins have experienced drastic declines in their trading volumes.
- More than 75% of the current memecoins appeared in the last year, thanks to their simplicity and accessibility, allowing them to quickly attract market interest.
- Binance warns about the risks of pump-and-dump schemes, which harm retail investors.
A new report from Binance Research reveals an alarming reality in the memecoin market. According to the analysis, an overwhelming 97% of these cryptocurrencies have suffered drastic declines in their trading volumes, reflecting their high volatility and susceptibility to market manipulation.
The report, led by Josh Wong, Binance’s macroeconomic researcher, notes that the majority of memecoins, which emerged during the frenzy of 2023 and 2024, have proven to be fleeting. Most have seen their trading volumes plummet to nearly zero, a situation exacerbated by the speculative nature of the market and the appeal of quick profits often at the expense of retail investors.
The speed at which these cryptocurrencies have gained popularity has been highly relevant. According to Binance, over 75% of the current memecoins appeared in the last year. This phenomenon is due to their simplicity and accessibility, which allows them to quickly capture market interest and form communities more agilely than traditional altcoins.
Wong explains that the time it takes for a memecoin consumer to become an investor is considerably shorter than that for those investing in more solid technology assets, contributing to the rapid propagation of their narratives.
Binance Warns About the Proliferation of Pump-and-Dump Schemes
However, the exuberance of the market has also brought serious risks. Binance warns of the high probability of pump-and-dump schemes, where prices are manipulated to provide liquidity to early investors at the expense of those who enter later. Although memecoins offer greater transparency and ease of access, these characteristics have not fully shielded investors from predatory practices.
While the majority of these cryptocurrencies struggle to remain relevant in the market, a handful of them, like Dogecoin and Shiba Inu, have managed to endure over time. However, the report highlights that the survival rate for most of these assets is extremely low, with only a few able to build sustainable ecosystems and dedicated communities.