Author: Neptune Mutual
Translation: Plain Blockchain
In recent years, memecoins and NFTs have become notable assets in the crypto world.
Memecoins are a type of cryptocurrency inspired by internet memes, which have garnered significant attention and amassed millions of followers. The support of the community and the buzz on social media have driven their prices to significant highs. On the other hand, NFTs are blockchain-based digital assets representing ownership of unique items such as artworks, music, or collectibles. Unlike memecoins, NFTs typically have some utility within their ecosystems.
Bull markets are known for their price surges and play a crucial role in asset growth. During bull markets, investors are more willing to take risks and try novel assets, leading to the popularity and increased value of memecoins and NFTs. This environment fosters innovation and brings a wider audience into these digital assets, highlighting their potential and risks.
In this article, we will explore the dynamics of memecoins and NFTs in previous and current bull markets.
1. Memecoins in Previous Bull Markets
During the previous bull market from 2020 to 2021, the adoption of Web3 by institutions became well-known. Bitcoin broke previous highs, reaching $64,000. This surge marked a shift in user perceptions, triggering speculative behavior and leading many institutions and organizations to adopt cryptocurrencies.
At this stage, memecoins like Dogecoin and Shiba Inu became significant players in the cryptocurrency space. The prices of these memecoins soared to unprecedented heights, driven by social media frenzy and the fear of missing out (FOMO) among retail investors.
Dogecoin was initially created as a joke in 2013 but gained serious attention in 2021. In fact, Dogecoin's price surged by 3300%, making it the tenth-ranked cryptocurrency by market capitalization. In May 2021, it reached a historic high of $0.731. This was largely due to support from celebrities like Elon Musk and Mark Cuban.
Shiba Inu, often referred to as the "Dogecoin killer," followed the popularity of Dogecoin and the growing meme culture. Platforms like Reddit, Twitter, and TikTok played a crucial role in spreading memes, generating viral interest, and driving up prices.
Many investors viewed these coins as lottery tickets, hoping to profit from short-term gains rather than making long-term investments. Media coverage had a significant impact, amplifying price fluctuations through sensational headlines and viral tweets.
2. Memecoins in Current Bull Markets
Today's bull market began around April 2024, with new memecoins like PEPE gaining popularity, joining the ranks of previously meme-inspired cryptocurrencies. PEPE, based on the "Pepe the Frog" meme, quickly caught people's attention due to its fun concept and active community.
Market dynamics have changed, and investors have become more cautious. They no longer blindly chase any memecoin but focus on the coin's potential utility, community strength, and financial model. Compared to the previous period, this has made the memecoin market more stable.
Investor sentiment seems to have changed as well. People are interested not only in quick profits but also in the long-term prospects and community activities of these coins. Memecoin communities have become stronger and more actively promote their coins, sometimes even creating real-world projects and events.
Despite investors being more cautious and prudent, they have still fallen victim to attacks on multiple memecoins, such as the CONDOM operation targeting NORMIE and rug pulls.
3. NFTs in Previous Bull Markets
In the previous bull market, the popularity of NFTs (Non-Fungible Tokens) soared, becoming a major trend in the crypto world. Although NFTs were recognized and adopted through the EIP-721 standard in 2017, that year was a period of experimentation and development. The launch of Cryptopunks and CryptoKitties was particularly noteworthy during that period, helping shape the NFT ecosystem.
The exponential growth of NFTs occurred during the bull market from 2020 to 2021. Key trends during this period included the rise of digital art and collectibles. Platforms like CryptoPunks and Bored Ape Yacht Club became extremely popular, offering users digital avatars they could own and trade. These NFTs often served as status symbols and collectibles within digital communities.
The market grew rapidly, benefiting from the novelty of owning digital assets and the convenience of trading on blockchain platforms. Media coverage and celebrity endorsements drove public interest, bringing NFTs into the mainstream and encouraging more people to explore this new form of digital ownership.
High-profile sales made headlines, with some NFTs selling for millions of dollars. Beeple's digital artwork "Everydays: The First 5000 Days" sold for a record-breaking $69.3 million in March 2021. In 2021 alone, approximately $41 billion worth of cryptocurrencies was spent in the NFT market, demonstrating its rapid rise and significant market interest.
In terms of attacks, Stazie lost around $1 million to a phishing scam in August 2021. Iconics, Evolved Apes, Bored Bunny, and Frosties were some of the fraudulent projects manipulated after the bull market.
4. NFTs in Current Bull Markets
Following the previous bull market, the NFT market experienced a sharp decline, leading to the NFT crash of 2022. Many NFTs, including popular works, showed weakness and reached their lowest prices.
While there has been some renewed interest around 2023, the NFT market may only partially recover during the 2024 bull market. However, we are unlikely to see the same hype and chart explosions as in 2021.
An important development in the current bull market is the evolution of NFTs, accompanied by new trends and their expansion into gaming, the metaverse, and the sports industry. This allows players to own and trade unique items in virtual worlds and games. Similarly, the entry of traditional brands into the NFT space may have given it a boost. For example, Starbucks launched its first premium NFT series in March 2023, selling 2,000 digital stamps at $100 each in just 20 minutes.
Pudgy Penguins is a prime example of an NFT project that has caused a sensation. Although it was launched in August 2021, it gained the most attention in the first few months of 2024. These PFT-themed artworks surged due to their appealing art style and strong community.
In conclusion, investors' attitudes are maturing, placing more emphasis on the practical benefits of NFTs rather than speculative trading. Additionally, there are now many smaller-scale NFT projects with more affordable prices and practical uses, as opposed to the few high-value collectibles seen in 2021.
The industry still faces challenges such as rug pulls, phishing attacks, smart contract vulnerabilities, DeFi wallet issues, which could affect user confidence. For example, a phishing attack on OpenSea in September 2023 revealed security issues that need attention.
Similarly, MetaDragon is a recent case of a hacker attack caused by a smart contract vulnerability.
5. Comparative Analysis
Comparing the previous and current bull markets, memecoins and NFTs exhibit some similarities and differences.
In both periods, memecoins like Dogecoin and PEPE heavily rely on social media hype and community support to drive interest and prices. However, current investors are more cautious, evaluating long-term value and community engagement, rather than just chasing hype.
The trends of NFTs have also changed. The enthusiasm for high-priced sales and widespread passion for NFTs as collectibles has cooled down. Today, NFTs focus more on practicality in gaming, the metaverse, and integration with traditional brands, leading to a more balanced growth pattern and more practical projects.
In terms of security, both markets have experienced hacker attacks and fraudulent activities, resulting in millions of dollars in losses. In both bull markets, fraud, phishing, and smart contract vulnerabilities have been exploited to impact digital assets. Addressing these challenges is crucial to maintaining investor confidence in these assets.
Legitimate memecoins and NFT projects continue to strengthen their defenses, conduct smart contract audits, and address vulnerabilities. As a user, it's important to remain vigilant and check for potential vulnerabilities in projects. Reviewing the community and user sentiment of a project may be helpful.
Additionally, using multi-signature wallets (requiring multiple approvals for transactions), advanced consensus mechanisms, and hardware security modules are crucial for building a more secure infrastructure.
For owners of digital assets, another effective way to protect their assets is to consider DeFi insurance. It provides financial protection against losses due to hacker attacks, exploit vulnerabilities, or other unexpected security flaws.
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