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Why are meme coins so popular today?
Meme coins have seen a significant recovery today after a dismal performance the previous day. Almost all meme coins such as Dogecoin, Shiba Inu, Pepe Coin, WIF, and others have rallied more than 10% today, indicating growing investor confidence in the cryptocurrency.
While the broader market recovery could be a potential reason behind the recent recovery, other factors could also have contributed to the gains in the sector. Here, we explore the potential reason behind the recent rally in the meme coin sector.
Why are Meme Coins rising today?
FTX Refund Boosts Market Sentiment
THE cryptocurrency The market is showing signs of optimism today, with some analysts pointing to potential liquidity injections as a key factor. Speculation is swirling around the collapsed exchange FTX, which could hand out a whopping $16 billion to former customers.
Meanwhile, experts believe that a significant portion of this money could be reinvested in cryptocurrencies, fueling growth. This optimism seems to have strengthened market optimism, while also driving the meme coins
even prices are higher today.
In particular, reinvestment by these crypto-savvy individuals could create substantial buying pressure, driving prices higher. While the exact impact is yet to be seen, even a partial return of these funds could be a major boost for the cryptocurrency market, let alone meme coins.
Bitcoin ETF Inflow, Ether ETF Anticipation Boosts Meme Coin’s Performance
THE US Spot Bitcoin ETFs recorded an inflow of $143.1 million on July 6, indicating that institutions have likely regained confidence in the cryptocurrency. This has provided a strong boost to the broader cryptocurrency market, as well as meme coins.
On the other hand, the anticipation of the US SEC’s approval of the Ethereum ETF in mid-July has also increased market confidence. To put this into context, the market is betting on an altcoin rally along with a renewed confidence in meme coins, following the US Ethereum Spot ETFs
approval.
Read also: Dogecoin Regains $0.1 Support Despite Whales Selling 500 Million DOGE
VanEck Shares Cryptocurrency Post on Solana
VanEck was the first company in the United States to apply for a Solana ETFs with the US SEC. This move fueled confidence in the cryptocurrency market, driving up the price of Solana and Solana-based meme coins.
However, in a recent X post, VanEck shared a cryptic post that suggests the company has added Solana to its portfolio. For context, in a recent X post, VanEck said, “I got Sol, but I’m not a soldier.”
Meme Coin Rally
The overall meme coin market cap is up nearly 13% today to $41.77 billion, with nearly all major players in the segment recovering. For example, Dogecoin Price rose more than 10% today, with Shiba Inu Price increasing by about 15%. At the same time, Pepe coin price has increased by about 11% while the price of dogwifhat has jumped by 17%.
Meanwhile, the recent cryptocurrency market crash was mainly due to the immense selling pressure from the German and US governments. For context, governments have recently dumped huge amounts of Bitcoin on exchanges, which has raised concerns in the cryptocurrency market, also impacting the performance of meme coins.
Furthermore, the panic selling in the market was further fueled by Mt. Gox’s repayment to creditors in BTC and BCH. However, analysts have suggested that the government BTC sale will likely have minimal impact on the cryptocurrency market.
For context, CryptoQuant founder Ki Yong Ju downplays concerns that a government issuance of Bitcoin could impact the market. He points out that despite $224 billion flowing into Bitcoin since 2023, government-seized Bitcoin sales only amount to about $9 billion.
This translates to a paltry 4% of the total value of Bitcoin realized by 2023. Ju advises investors not to leave FUD (fear, uncertainty, doubt) surrounding government sales influence their trading decisions. This comment may also have contributed to the gains in the meme coin industry today.
Read also: XRP throws a buy signal for $0.50 price as whales and prominent investors buy the dip