Making sense of market moves
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When bitcoin crossed the $100,000 mark earlier this month, you knew that shameless grifts, Ponzi schemes, and memecoins weren’t far behind.
Yesterday, the memecoin Fartcoin topped a market cap of $700 million, making it worth more than a bunch of US publicly traded firms. The digital token, based on the Solana blockchain, has jumped ~200% in the past week amid a resurgence of interest in memecoins since the election.
If you’re thinking, “This has got to be a joke”...well, it is a joke, and that’s the whole point. Memecoins trade on attention and virality. When people post, speculators (aka gamblers) buy.
One difference between now and the memecoin boom of 2021? Generative AI is now a thing. The idea for Fartcoin reportedly originated from the AI bot “Terminal of Truths,” which is notorious for posting NSFW content on X. In July, the bot was gifted $50,000 in bitcoin from VC bigwig Marc Andreessen for developing tokens and….a billboard? The anonymous creators of Fartcoin launched the Solana memecoin on popular crypto app, Pump.fun.
Memecoin hall of fame
If any memecoin does ring a bell, it’s probably Dogecoin, which famously made some of its early investors millionaires in 2021 before crashing hard over the next few years. Dogecoin has enjoyed a renaissance since the election of Donald Trump, likely due to its embrace by Elon Musk, who dubbed his “Department of Government Efficiency” (DOGE) after the coin. Dogecoin is up about 150% since the election.
Fartcoin and other memecoins have no fundamental value, and some recently released tokens, like the Hawk Tuah memecoin, have been dogged by controversy and collapsed in spectacular fashion. Some leaders in the crypto space, such as the co-founder of the Cardano blockchain Charles Hoskinson, warn that once the joke stops being funny, most memecoins will crash to their ultimate end state: zero.—NF & LB