Memecoin Mania on Solana Blockchain Mirrors Ethereum's 2017 ICO Bubble
Summary:
The Solana blockchain has emerged as a hotbed for memecoins, cryptocurrencies with no substantial real-world utility, contributing to a surge in market capitalization. This frenzy is drawing comparisons to Ethereum's 2017 ICO bubble. In recent instances, influencers have disappeared with pre-sale funds or dumped them in the market post-launch. While stories of quick riches attract altcoin investors, experts warn this could lead to significant losses and eventual liquidation of new users who are blindly investing in such volatile assets.
The Solana (SOL) blockchain has turned into a hotbed for new meme-based cryptocurrencies this bull season. Several of these freshly minted memecoins have amassed billions in market cap, reminding many observers of the 2017 bubble during Ethereum's (ETH) initial coin offering (ICO) phase when scores of crypto projects accumulated millions but failed to deliver. Memecoins, which originate from internet memes or contain some humorous element, typically don't carry any substantial real-world use. Their purpose primarily is to reference pop culture. These cryptocurrencies are highly volatile and have garnered support from passionate online communities. Dogecoin (DOGE), backed by Elon Musk during the 2021 bull run, is considered the first memecoin. In 2024, countless memecoins, some no older than a week, have amassed billions in market cap, creating new crypto millionaires by the hour. Many are drawing parallels between today's memecoin offerings (MCOs) and the ICO pre-sale era of 2017 because of numerous influencers successfully generating millions of dollars in pre-sale to introduce new memecoins. Concerning this, observers on X compared the current scenario to the 2017 ETH ICO bubble wherein many crypto projects failed to deliver post-raising funds. A 2018 report stated that over 90% of such ICO projects faced failure. In line with this, there are numerous accounts of influencers either disappearing with pre-sale funds or flooding the market immediately post-launch. In one instance, a developer unintentionally burned 535,000 SOL ($10.4 million) raised for launching a memecoin. A user on X stated that the current memecoin fervor is a more straightforward version of the 2017 ICO boom and the 2021 NFT/crypto-art bubble since projects "no longer have to pretend to deliver on a fake white paper, and investors no longer have to pretend to be in it for the art." The tales of traders making millions within days often entice others to test their luck. However, they often end up losing a considerable portion of their investment. Cryptocurrency supporters suggest that the implosion of the memecoin bubble would lead to the liquidation of millions of new users who are blindly investing in technology devoid of any utility. Magazine: Inside Pink Drainer — A security analyst defends his crypto scam operation.
Published At
3/18/2024 11:43:50 AM
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