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The price of ether jumped on Friday as investors bet on the latest cryptocurrency memecoins.
ether According to Coin Metrics. It’s still below the key $2,000 level that it broke briefly in April after the Shapella upgrade.
bitcoin It was more than 2% higher at $29,496.34 and it is slowly retreating towards the $30,000 level which has struggled to recover since mid-April.
Market participants put in place the move in attempts to bring meme-mania back to crypto. Cryptocurrencies rose as the year began but saw volatility considerably lower. Many investors have been on the sidelines in the aftermath of the FTX crash, waiting for the bad actors and irresponsible or unserious projects that contributed to some of the disastrous events of 2022 to be washed out of the market.
Memecoins like PEPE and SPONGE as well Dogecoin or shiba inu driven by hype and social media and many investors have suffered huge losses from investing in it.
“There’s a lot of on-chain memecoin activity right now that’s generating a lot of gas fees,” or transaction fees on the Ethereum network, and “pushing ETH further contraction,” said Michael Renko, which means supply is decreasing rather than increasing, analyst Michael Renko said. Research in Delphi Digital.
The newly created SpongeBob Token (SPONGE), which is based on Spongebob Squarepants and launched Thursday, is up nearly 600% since then and is trading for less than 1 percent per coin, according to CoinMarketCap.
CoinMarketCap said Pepecoin (PEPE), based on the internet meme Pepe the Frog, is up more than 120% in the past 24 hours. Pepe the Frog was created by cartoonist Matt Furie in the early 2000s. In 2016, she was so captured by the alt-right that the US-based Anti-Defamation League put her on their list of hate symbols.
“One of the main reasons for ETH’s rally … is due to the resurgence of the Mymcoin,” said Connor Ryder, research analyst at Kaiko, a crypto data provider. “Whatever your thoughts on memecoins are, the facts are that they drive users to transact on Ethereum, which helps the network earn more fees. Ethereum gas fees have been revived by the return of memecoins, today reaching their highest levels in a year.”
“As gas fees increase, more ETH gets burned, and at current activity levels, ETH is a deflationary asset, which should help boost the price of ETH,” Ryder added. “Over the past 24 hours, trading volumes for PEPE on Uniswap have surpassed those of Tether and Wrapped Bitcoin, two of the highest volume tokens on the exchange.”
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