Meme Coins On Flying, Between Investment And Speculation

JAKARTA - The phenomenon of meme coins is in the spotlight on the crypto market. This soaring popularity raises fears of the recurrence of crypto bubble explosions that have occurred.

According to Bloomberg, the current pattern of meme coin price movements resembled the conditions before the eruption of the crypto bubble two years ago. The market is advised to be aware of possible corrections that could occur, given the high volatility.

The trading volume of meme coins has reached a new high, with transaction values reaching around $80 billion (around Rp1,245 trillion). Coins like Dogwifhat and Pepe are now a topic of discussion more frequently than Bitcoin. While included in the category of highly speculative and volatile assets, this trend raises the big question: is this a positive indicator or precursor of large market corrections?

In 2021, the crypto industry experienced a dramatic decline after reaching its highest value. CNBC reports that Bitcoin and Ethereum, the two largest digital currencies, lost up to three-quarters of their value. Industry previously valued at more than $3 trillion (approximately IDR 46,716 trillion), slumped to around 900 billion (approximately IDR 14,015 trillion). Ethereum itself fell more than 23% to $3,769.70 (approximately IDR 58,679,000), while Bitcoin fell nearly 30% from its peak.

Investopedia defines coin meme' as a crypto asset inspired by various elements of pop culture. Despite being considered a highly volatile investment, meme coins such as Pepe (PEPE), Floki (FLOKI), dogfighting (WIF), and Grok (GROK) remain in demand. A more affordable price and an online community that supports it is an attraction in itself.

The significant increase in the price of meme coins may indicate market optimism, but history has shown that euphoria can quickly turn into concern. Therefore, investors are advised to conduct thorough research and invest wisely, considering the risks.

It is important for investors to understand that meme coins are not traditional investments. They are often driven by trends and internet memes, not by strong economic fundamentals. This means that they can experience extreme price changes in a very short time.