There is no denying Bitcoin has had an impactful 2024. The beginning of the year saw the introduction of the first Bitcoin spot ETFs. And, for much of the year, as US Presidential hopefuls debated various issues, Bitcoin became a prominent debate topic on the biggest stage of all. These actions saw Bitcoin’s price rise from $44,000 at the start of the year to surpass $100,000 for the first time in December. As a result of this increased exposure and Bitcoin’s stellar price performance, the rest of the cryptocurrency market has also seen some significant gains: not least meme coins.
Meme coins, but their very nature, do not have utility. They are marketed and bought on the strength of community sentiment. As such, their prices can be highly volatile, even compared to Bitcoin. This means greater risk, but it also means potentially greater rewards, which is why speculative investors look for the next meme coin to 100x rather than putting their money into BTC. If a meme coin is 100x, it means it could potentially grow 10 times its initial value, which would provide huge profits for initial investors.
Although nobody knows the ceiling for Bitcoin’s price rise, at $100,000 it is difficult to imagine the world’s largest cryptocurrency seeing a 10x price rise. In contrast, some meme coins manage that level of increase in the first few days of launching.
In fact, in 2024, which is being billed as the year of the meme coin by many investors, several meme coins outperformed Bitcoin. Shiba Inu has posted 150% gains from the start of the year. Doge started the year at $0.091 and is currently trading at $0.31, which is a 240% year-to-date increase. Doge’s price increase was helped by Elon Musk shilling the first meme coin as he joined Donald Trump on the election trail. Other meme coins have seen increases that match those of Shiba Inu, too.
Bitcoin’s discussion during the pre-election campaign helped bring greater acceptance of the cryptocurrency. People with very little knowledge of Bitcoin heard its name mentioned by Trump as well as his competitors. While that doesn’t necessarily bring legitimacy to the market, it has led to a lot of people searching for more information on cryptocurrency. At the same time, Musk’s involvement meant increased mentions of Doge, especially after he took over the newly formed group called D.O.G.E. and this brought greater credence to that coin, too.
Trump is seen as being crypto-friendly. His victory has already seen crypto-critic Gary Gensler resign as head of the SEC, and Trump’s nominee to take his place, Paul Atkins is known to be pro-crypto. This is likely to mean less resistance from the SEC towards new crypto-based financial products. Some optimistic investors have said that it may even lead to an established meme coin like Doge getting its first ETF. It should be noted that no fund management company has submitted a Doge ETF proposal, as yet, but one could be coming.
Atkins’ appointment, assuming that he does get the position, would also likely see greater regulation for cryptocurrency. Again, a lot of this would concentrate on Bitcoin, but this could have a knock-on effect on Bitcoin-based meme coins, and a lot of money is backing this potential move as Bitcoin meme coins are gaining popularity, alongside Solana and Ethereum-based tokens.
With so many new meme coins hitting the market in the past 12 months, people investigating the crypto market have become increasingly likely to be exposed to these coins. Although new entrants are still more likely to invest in Bitcoin, at least some of those new investors will go on to invest in other cryptos like meme coins.
Bitcoin is the largest cryptocurrency by market cap. Its dominance, which is Bitcoin’s market capitalization compared to the market cap of the whole cryptocurrency market, has dropped since its early days but still sits at just over 55%. Bitcoin dominance has been as low as 33%. At the start of this year, it was at around 52%. The launch of Bitcoin ETFs saw considerable investment, although this has only pushed Bitcoin dominance up by 3% in the preceding months.
Bitcoin dominance not only means that Bitcoin’s performance has a direct effect on overall market performance, but it also means that other coins tend to follow Bitcoin’s price movement inertia, at least to some extent. If Bitcoin remains stable or its price increases, altcoins have the opportunity to move up in value. If it loses value, other coins tend to follow suit. As such, Bitcoin’s impressive price gains over the year have led to similar gains for altcoins, including meme coins.
2025 is going to see a lot of changes in the cryptocurrency market, not least because of Trump’s election victory and the moves that he has already made since being announced as the winner. He takes his seat on January 20, the same date Gary Gensler steps down, so analysts and spectators won’t have long to wait before seeing more likely price movements for Bitcoin and meme coins.
by Asim BN via Digital Information World
