Meme coin rally seems to have begun, at the expense of bitcoin?

'Joke' currencies suddenly not a laughing matter as valuations soar

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Image: Shutterstock via Dennis

Bitcoin has led the crypto advance this year, but altcoins may soon outperform, analysts say. There are early signs of a so-called altcoin season.

Bitcoin (BTC) recorded its highest value of $65,000 Monday, while inflows into spot bitcoin ETFs, baskets of crypto investments, continue to pick up. Bitcoin has gained 50% in value since the beginning of the year, while the broad market CoinDesk 20 Index (CD20) rose 33% over the same period.

Popular tokens with dog-themed dogecoin (DOGE) and shiba inu (SHIB) last week posted gains of forty to 50%, while newer entrants such as pepe coin (PEPE) bonk (BONK) and dogwifhat (WIF) doubled in price during the same period.

On 1 March, Solana’s native token, SOL, also peaked. This advance solidified SOL as the fourth largest cryptocurrency.

The advance of tokens that were once launched as a joke could well work to Bitcoin’s disadvantage, and so-called altcoins have also caused Bitcoin to move sideways at best in the past. Investors go for the highest returns and do not remain loyal to the oldest cryptocurrency.

True, bitcoin did trigger the bull market, but now the altcoins seem to be on the move. For as long as it lasts, at least, because as many as 14,039 of the more than 24,000 crypto coins listed since 2014 are no longer active, or more than half, according to figures from CoinGecko. So the interest in meme coins may well be temporary.

JP Morgan analysts warn that after the halving, bitcoin’s price could potentially fall to $42,000. Halving means halving the reward for mined crypto coins. For every transaction that delvers verify, they receive 50% fewer bitcoins. Halving is scheduled every 210,000 blocks, roughly every four years, until the maximum number of 21 million bitcoins is created by the network.

That halving was actually seen as a major boost to Bitcoin’s share price, which is becoming scarcer as a result. Reduced profitability and increased production costs are also likely to cause many miners to drop out. However, Bitcoin’s high value also has adverse effects for investors: The cost of conducting transactions with Bitcoin has increased by 20.86%, and for Ethereum by as much as 43.56%. And so some experts warn: sentiment in crypto could turn quickly.

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