July 24, 2024
Galaxy Digital CEO Mike Novogratz urges removal of Senator Warren


Meme coins have seen spectacular growth this year reaching almost $60 billion amidst the broader market rally. But not everyone is a fan. Many experts and market players have weighed in on how meme coins have overshadowed more legitimate projects in the industry.

Even as the industry remains unsure of the latest hype and the flurry of new meme coins that attract attention and drive community-driven engagement, Galaxy Digital CEO Michael Novogratz believes that these tokens have the “most powerful narratives out there.”

Novogratz on Meme Coins

Shedding a light on how investors are making fortunes from meme coins, Novogratz said that there are two ways. In a video from Business Untitled, the exec said that the first way is to choose the right meme coin to invest in and the second way is to create one.

“Memecoins – whether you’re a fan or not – have become a cornerstone of the crypto economy… In today’s market, they’re one of the most powerful narratives out there.”

Novogratz’s comments follow a report by Galaxy Digital, which countered the notion that meme coins are just a passing trend and a fad and instead argued that the primary purpose of these tokens is wealth creation.

Risks Associated With Meme Coins

The meme coin market has grown significantly this year with March seeing $13 billion in spot trading volumes on exchanges. These tokens have even outperformed major blue-chip cryptocurrencies such as Ethereum and Solana.

However, a recent report by CoinShares highlighted the risks associated with investing in meme coins. The firm noted that market manipulation and liquidity issues due to asset concentration among a few holders pose a major threat to the meme coin holders.

Large trades by these whales can cause intense price volatility and liquidity issues, especially if they control liquidity on decentralized exchange platforms.

Furthermore, a high Gini coefficient of 0.8 indicates significant centralization of token holdings.



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