Memecoins are losing ground as market loses ground

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Memecoins are losing ground as market loses ground

While early buyers of memecoins such as PEPE, TURBO, and WOJAK have enjoyed a wonderful start to the month, the market has been losing ground.

The largest three non-pegged digital assets, BTC, ETH, and BNB, have all dropped by more than 5% in the past seven days.

Despite that, the memecoin craze has continued, with the tokens' cashtags dominating social media and tickers trending on decentralized exchanges - GeckoTerminal, a data platform developed by CoinGecko, showed that four of the top five trading pairs by volume in the past day were memecoins.

LADYS, a token inspired by the recent craze surrounding Milady NFTs, exhibits the second-highest volume of all trading pairs. A PEPE/WETH pair on Uniswap is the third-highest, with just over $78M in volume.

The CEO of Aurox, a software company that is developing a trading terminal, said that memecoins were fun for some people, but less sophisticated players are generally losing money on the assets.

'The insiders that are making bank, they're drawing liquidity out of the rest of the market, the rest of the retail,' Khazaradze told The Defiant.

The CEO said that it takes a coordinated effort to push a token like PEPE to such a high market capitalization.

The SEC has been pursuing legal action against digital assets projects all year, Khazaradze said.

It is generally not a sign of a healthy market when digital assets without use cases are topping charts. With tokens such as PEPE, which emphasize their lack of usefulness on their site, and established DeFi tokens like Maker's MKR, it raises the question of how useful these assets really are.

The crypto market can't be completely written off as unhealthy - while some would say that the attention and capital attracted by memecoins is a waste, Uniswap, PancakeSwap, and other decentralized exchanges are the ones that facilitate the trades.

While the memecoins traders are playing hot potato with may not provide lasting value, the DEXs that traders are using continue to show their worth.

The frequency of rug pulls is increasing, according to Aurox data. There were 14 rug pulls three weeks ago, 189 two weeks ago, and 279 in the past week, with the amounts drained getting larger each week. In the past seven days alone, malicious developers have raked in more than $90 million.

It's all a dog day of crypto. Large regulatory uncertainty continues, making it difficult for legitimate projects to rapidly progress with their plans.

Khazaradze, who is planning to take Aurox public this year, says he constantly needs to change the language in his filings with the SEC as regulatory and enforcement actions take place.