The rise of memecoins has sparked a new craze in the cryptocurrency world, attracting inexperienced investors in search of the next big token that could lead to massive profits.
According to market intelligence platform IntoTheBlock, the number of wallet addresses holding meme-related tokens for less than 30 days reached a record high in March, indicating a significant influx of new traders purchasing memecoins.
The surge in traders entering the memecoin market can be attributed to the substantial gains achieved by memecoins in the first quarter of 2024. Coin information tracker CoinGecko named the memecoin sector the “most profitable crypto narrative” during this period, with memecoins delivering an average return of 1,312.6%, the highest among the top tokens by market capitalization. Projects like Book of Meme (BOME) and Dogwifhat (WIF) contributed to these impressive percentages during the memecoin frenzy.
The allure of life-changing profits may have also played a role in attracting traders to the sector. For example, one trader turned a meager $62 investment into a staggering $2 million in December by purchasing a Solana memecoin. This individual stumbled upon a memecoin called Silly Dragon (SILLY), which humorously mocked Solana co-founder Anatoly Yakovenko’s Halloween costume. Similarly, a recent case saw another trader turn $13,000 into $2 million within just one hour after acquiring a meme-based token.
On April 3, a crypto trader experienced a 15,700% gain by investing in a memecoin called Donotfomoew (MOEW), which was minted on the Base network.
However, while memecoins have the potential for enormous profits, not everyone is fortunate enough to benefit. Some individuals miss out on gains by selling too early, while others fall victim to scammers who exploit the hype surrounding memecoin presales to steal user funds.
For instance, on March 15, a trader missed out on potential millions by selling BOME tokens before their prices skyrocketed. The trader purchased 170 million BOME for $8,000 but sold them for around $131,000. At the time of writing, BOME is trading at approximately $0.01615, meaning the tokens could have been worth $2.7 million in the current market.
In another case, a Solana memecoin project called “Condom” abandoned its investors before its launch, taking almost $1 million worth of Solana (SOL) tokens with them.
It is crucial for investors to be aware of the risks associated with investing in Solana memecoins and to exercise caution to avoid falling into potential pitfalls.