Memecoin craze continues despite early buyers losing ground

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Memecoin craze continues despite early buyers losing ground

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

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

Despite that, the memecoin craze has continues, 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 that was inspired by the recent craze surrounding Milady NFTs, has the second-highest volume of all trading pairs. A pair of Uniswap, with just over $78M, is the third-highest, with a PEPE/WETH pair on Uniswap being the third-highest.

Although memecoins are fun for some people, less sophisticated players are generally losing money on the assets, said Giorgi Khazaradze, head of Aurox, a software company that is developing a trading terminal.

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 it takes a coordinated effort to push a token like PEPE to such a high market capitalization, adding that it takes a collective effort to push a token like PEPE to such a high market capitalization.

Khazaradze added that the memecoin craze won't make crypto look any better in the eyes of the SEC, who has been pursuing lawsuits against digital asset projects for years.

While digital assets with no use cases are a common sight, it's generally not a sign of a healthy market. By using tokens like PEPE, which emphasise their lack of utility on their website, and being valued higher than 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, as some would say the attention and capital attracted by memecoins is a waste, Uniswap, PancakeSwap, and other decentralized exchanges are the ones facilitating 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, said Aurox's data. The amounts drained in the past week were 140 rug pulls three weeks ago, 189 two weeks ago, and 279 in the past week, according to the data. In the past seven days alone, malicious developers have raked in more than $90 million.

In all, these are the dog days of crypto. Legislative projects are prone to regulatory uncertainty, causing it difficult for them to confidently move forward with their plans.

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