Memecoin Market Feels the Chill as Bitcoin Stumbles

Memecoins are facing a turbulent market, with Solana's and Base's memecoin market caps taking hits alongside Bitcoin's recent downturn.

Memecoins on the Solana network and Coinbase's Ethereum layer-2 Base saw their market caps dip over the past day or two, coinciding with a drop in Bitcoin's value. Analysts suggest Bitcoin's movements have a big impact on memecoins, often resulting in amplified reactions from the meme tokens. Boba Oppa, a memecoin launched on the Solana blockchain also faced serious volatility dipping 70+% after its launch. Despite facing challenges, like exit scams and rapid price changes, some memecoin communities remain resilient.

Memecoin Craze Cooling Down?

In the world of cryptocurrency, volatility is certainly not a stranger, especially when it comes to memecoins. Over the past day, the market witnessed a dip in the total market capitalizations of memecoins on both the Solana network and Coinbase's Ethereum layer-2 Base. Solana's memecoin market cap dropped by 1.9% to $8.7 billion and Base's by 4.4% to $1.5 billion, which coincided with a drop in Bitcoin's (BTC) value.

At press time, BTC was trading hands at $66,323 after its price fell by about 1.09% over the past day of trading, according to CoinMarketCap. The crypto king also ended up hitting a low price of $64,559.90 over the same time period.

This is not entirely unexpected, as memecoins are often more volatile and sensitive to broader market movements. Crypto analyst Mati Greenspan of Quantum Economics humorously pointed out that the peak of this memecoin craze aligned with April Fool's Day, suggesting that the speculative bubble surrounding these tokens might be losing its charm.

Beyond memecoins, the total cryptocurrency market cap also took a hit, dropping by 0.66% to $2.5 trillion in the past 24 hours. Analysts suggest that Bitcoin's movements heavily influence the performance of memecoins, with Greenspan sharing that memecoins often experience amplified reactions to Bitcoin's price changes. BTC’s price only dropped by 1.09% in the past day, but the native token of a new Layer 3 network called “Degen” (DEGEN) on Base suffered a price plunge of more than 7% over the same time period.

Charles Edwards, founder of Capriole, a quantitative Bitcoin and digital asset fund, agrees with this and explains that memecoins typically suffer double the impact of Bitcoin's downturns due to their high beta on Bitcoin.

The excitement and hype surrounding the Solana and Base ecosystems have driven much of the price movement in recent times. However, Edwards argues that these platforms have considerably less tangible value compared to Bitcoin and Ethereum. Crypto Banter podcast host Ran Neuner also commented on the situation, suggesting that the memecoin market might be nearing a point of oversaturation.

Boba Oppa's Wild Ride

Boba Oppa (BOBAOPPA), a memecoin based on the Solana blockchain and created by Taiwanese music celebrity and blockchain enthusiast Machi Big Brother (Jeffrey Huang), has also seen dramatic fluctuations in its price after a $40 million presale. The coin, which made its debut on Mar. 30, initially opened at a promising price of $0.001474 but experienced a major downturn, dropping by 74% to $0.0003854 not long after its launch. Despite this volatility, Boba Oppa still managed to regain some ground again, and is currently trading at $0.0008736 after its price jumped 49+% throughout the past day, according to CoinGecko.

The initial excitement around Boba Oppa was palpable. In fact, investors poured more than 200,000 SOL into the memecoin's address in response to a tweet from Huang, raising more than $40 million for the project. This enthusiasm has propelled the coin to a market capitalization of $73 million. However, the rapid price changes have left many investors disillusioned, with one sharing his massive loss on X, stating, "My $10K is now worth $129.00, WTF man.” Crypto influencer Borovik.sol also voiced some concerns about the presale dynamics, questioning the rationale behind immediate sell-offs post-launch.

In response to the turmoil, Machi Big Brother offered a controversial take, branding Boba Oppa as a "dump-and-pump" token, differentiating it from the typical "pump-and-dump" schemes usually seen in the memecoin sphere. Naturally, this sparked discussions among investors, with one asking if it is even possible to recover a big loss through the coin's passive income features, to which Huang cryptically replied, "Only if you pray hard enough."

Boba Oppa's creation was inspired by the recent popularity of canine-themed Solana memecoins and carries a unique backstory. According to the project's website, Boba Oppa is portrayed as the adventurous son of Machi Big Brother, embarking on a quest for generational wealth and personal milestones.

The surge in interest in Solana-based memecoins has been huge, with $149.2 million raised from 33 presales in just the past month. It is important to take into consideration that Anatoly Yakovenko, the co-founder of Solana, warned investors against getting carried away by the hype.

From Rugs to Riches

Despite their lack of inherent value, some memecoins are still quite resilient. Exit scams and rug pulls are not strange concepts in the crypto space, yet the story of Catwifhat (CIF), a Solana-based memecoin, stands out as a testament to the resilience and the decentralized spirit of crypto communities. Despite facing not one, but two major setbacks in a span of 12 days, the CIF project still managed to survive and maintain a dedicated community.

The project initially encountered turmoil shortly after its launch on Dec. 12 of 2023, when its founder allegedly offloaded their tokens into the open market, converting 20% of CIF's supply into 3.86 SOL (equivalent to approximately $265 at the time) , draining the project's liquidity. This move could have spelled the end for many projects, but CIF's investors quickly rallied. A new development team was formed from the investors that were left, who took charge and managed to rejuvenate the token, pushing its market cap to over $4 million by Dec. 23.

However, the project faced another major challenge on Dec. 24 when the token's largest liquidity provider removed 92% of its liquidity, causing the price to plummet by about 76%. Despite this setback, the resilience of the CIF community shone through yet again. The development team restructured and persisted with their efforts, continuing to work on the project against all odds.

Currently, CIF is worth about $0.001495, according to data from CoinMarketCap, and has a market cap of about $1.5 million. Ironically, the 200 million tokens sold by the founder on the launch day would be worth more than $250,000 today had they not been sold.