How Blue Chips Like Bitcoin, Ethereum Perform Vs. Meme coins in crypto winter
Begins with Bitcoin BTC/USD launched in 2009, the crypto market has grown exponentially to now offer more than 20,000 unique crypto tokens for investors to choose from.
While Bitcoin is still popular among 95% of today’s crypto investors, meme coins were quite the rage in 2021 and continue to gain investors’ attention despite their higher volatility.
After reaching a peak combined market capitalization of over $3 trillion in November 2021, crypto markets have been in a prolonged bear phase ever since.
Consists of Bitcoin, Ethereum ETH/USDaltcoins, stablecoins and meme coins, investors may be interested to know how these segments of the crypto space have performed relative to the broader market.
Let’s focus on how the top blue-chip cryptocurrencies have performed compared to the biggest meme coins during this extended crypto winter.
Bitcoin and Ethereum
The top two spots in the cryptocurrency market have always been reserved for Bitcoin and Ethereum, where the two together contribute almost 60% of the total market value of the entire listed cryptocurrency space.
In fact, they have also shown similar price performance, with Bitcoin and Ethereum falling 65% and 63% respectively from their all-time highs.
Long-term investors will still see a healthy profit considering both cryptocurrencies continue to trade well above pre-COVID levels.
This particular statistic has been repeated during each recent bear cycle, with both Bitcoin and Ethereum eventually moving higher towards a new ATH.
Tether, USD Coin and Binance Coin
The other three spots on the top five cryptocurrency list have some surprising winners. While both Tether USDT/USD and USD coin USDC/USD are stable coins and pegged to the US dollar, Binance BNB/USD is a cryptocurrency native to the Binance chain.
The fact that the third and fourth places are held by stablecoins reflects the meteoric rise in the use of stablecoins by the crypto community.
Compared to Bitcoin and Ethereum, stablecoins are known for price stability, and their value rises in tandem with the US dollar. As the dollar continues to strengthen against a basket of fiat currencies, both USDT and USDC increase in value accordingly.
Both of these stablecoins have seen their market caps rise even as Bitcoin, Ethereum and other altcoins fell sharply from their November 2021 peaks.
Binance, on the other hand, has seen a sharp correction in price, although it has outperformed Bitcoin and Ethereum.
The BNB token is trading around 52% lower than the all-time high of $686 reached on May 10, 2021.
The token has a market capitalization of over $50 billion and is a nod to the increasing number of transactions and developments taking place in the Binance ecosystem.
In fact, the Binance token is an integral part of many of Binance’s blockchain-based projects such as Binance Chain, Binance Smart Chain, Binance Academy and Trust Wallet.
Parent company Binance is one of the largest cryptocurrency exchanges globally based on daily trading volume and is determined to bring new-age finance to the world.
The Curious World of Meme Coins
Defined as cryptocurrencies that draw inspiration from memes, meme coins burst onto the scene in 2021.
The most popular meme coin and the largest market capitalization among this class of cryptocurrencies is Dogecoin DOGE/USD.
Inspired by an image of a Shiba Inu dog that was a viral meme on the internet, Dogecoin likes to support a large community of investors and celebrity influencers, including the likes of Elon Musk, who is often nicknamed “The Doge Father”.
Dogecoin reached an all-time high of 73 cents on May 7, 2021, and has seen its prices erode by more than 90% in the time since.
Regardless, the meme coin is extremely popular in the crypto community, especially among Gen Z investors.
Shiba Inu SHIB/USD is the second largest meme coin, with a market cap of $6.8 billion compared to Dogecoin’s $9.5 billion.
Like Dogecoin, the Shiba token has fallen by around 85% from its all-time high of $0.000086 reached on October 27, 2021, and along with Dogecoin has eroded billions of dollars in investor wealth.
The next three spots in the top meme coin list are made up of Dogelon Mars ELON/USD, Baby DogeCoin (KRYPTO: BabyDoge) and Samoyed coin SAMO/USDall of which have significantly lower market values than either Dogecoin or Shiba Inu.
These tokens have seen their prices drop by as high as 99% for ELON, 92% for SAMO and 82% for BabyDoge respectively.
Needless to say, the entire class of meme coins has far underperformed other altcoins and offers a far riskier proposition for crypto investors.
