Franklin Templeton Explores Memecoin Phenomenon and Potential for Rapid Gains
Summary:
Franklin Templeton, the multinational investment firm, has shared insights on memecoins in a recent investor note. Despite their lack of inherent value, the firm recognizes the potential for quick profits from these tokens. The note compares the price performance of memecoins to viral internet memes and highlights their low fees and volatility. Dogecoin, the first memecoin, has sparked the creation of many others. Franklin Templeton also discussed the connection between memecoins and their native networks, with a particular emphasis on the Solana-based BONK token. The total market value of all memecoins is approximately $65.5 billion, about 23% of the whole crypto market.
In a recent investor bulletin, the global investment giant Franklin Templeton shed light on the trending topic of memecoins. Despite acknowledging their lack of intrinsic value or practical use, the firm recognised these unique tokens' potential for rapid profit accumulation. The March 14 paper, titled “The Value Between Meme Coins and Their Native Networks,” illuminated the parallel between the price performance of memecoins and internet memes going viral. Popular due to their distinctive nature over the past year, memecoins attract investors with their minimal technical knowledge requirement, lower fees in comparison to other digital currencies, swift profit-making potential, and accompanying high price volatility. Dogecoin (DOGE), being the inaugural and monolith memecoin in terms of market value, triggered the proliferation of additional memecoins. As per Scott Melker's insights, XDOGE, which gained Elon Musk's endorsement for a long time, sits as the tenth largest digital currency with a market value of $26 billion. The Shiba-Inu dog-themed token witnessed a 14% leap in the recent past to touch $0.189 following Musk's suggestion for Tesla to facilitate DOGE payments. Further, Franklin Templeton expressed its belief in the firm correlation between memecoins and their respective native networks. This is evidenced by Solana-based dog-related memecoin BONK's astronomical surge of over 5,700% within a year, initiating in late 2023. In an effort to promote memecoin education and utilization, European fintech company Revolut introduced a "Learn and Earn Campaign" in February, which steered BONK towards a new peak in early March. CoinGecko estimates the total market value of all memecoins sits at $65.5 billion, encompassing about 23% of the entire crypto space. On a related note, Franklin Templeton is one of the contenders who applied to launch an Ether (ETH) exchange-traded fund (ETF) in the United States. However, its Bitcoin (BTC) ETF, named Franklin Bitcoin ETF (EZBC), has seen sluggish growth in net capital inflows totalling only $167 million to date, accounting for a mere 1.4% of the cumulative influx into the recently launched nine funds, as per Farside Investors.
Published At
3/14/2024 9:12:56 AM
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