The recent memecoin frenzy is indicative of shifting attitudes in the crypto space, according to CoinShares chief strategy officer Meltem Demirors.
“Pepe and this whole frog coin phenomenon, I’m not endorsing it in any way, I’m not participating in it in any way, but I do think it’s fascinating to see how much conversation it’s spurred and how much it shifted sentiment even in some of the groups and communities I’m in. People got really excited, I’m seeing a lot of ‘Oh baby, we’re back.'”
Demirors notes that crypto investors were way more comfortable with exposure to Bitcoin (BTC) and Ethereum (ETH) in the fourth quarter of 2022 and the first quarter of 2023 because they are lower-risk digital assets.
The recent PEPE frenzy, however, indicates that momentum could be shifting, according to the CoinShares executive.
“Now people are talking about these long-tail coins, people are trying to figure out what [they] want to have exposure to as we go into Q3/Q4. And again, we can’t forget, we’re going into another Bitcoin halving cycle. Now, again, history doesn’t repeat, but it does rhyme, and I think if we look at the pattern over the last three Bitcoin halvings, if we follow a similar pattern this time, we have a lot more data about this history of crypto, its price behavior over time, its price behavior in these different supply/demand environments, and so I do I think it’s important to look at.
I do think we’ll see more money staying within the crypto space looking to move further out on the risk curve as people see the opportunity to generate returns. So to me, Pepe is a great indicator that at least people within the crypto space are feeling more comfortable with risk.”
Historically, new crypto memecoins tend to display extreme volatility and can suffer from high concentrations of wealth and elevated risks of pump-and-dump price crashes.
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