Experts Weigh in on the Slowdown of the Meme Coin Bull Run

The trajectory of meme coins is closely tied to the overall state of the global market, reflecting macroeconomic trends with significantly higher volatility. This perspective was shared with Cointelegraph by Murad Mahmudov, a former Bitcoin maximalist and expert in the “funny money” niche.

According to him, “meme” crypto projects cannot be assessed using traditional fundamental analysis methods, which is essentially their advantage.

“If DeFi protocols start paying dividends, we can evaluate them based on 500 years of history on how to assess assets based on cash flows. […] Investment bankers will come and say ‘why should I pay 200 P/E for this thing?'” the expert noted.

Meme coins defy such evaluation, hence their potential is “limitless”:

“If an asset trades and behaves like a meme, then there is no limit to its growth because who knows how to evaluate it?”

Mahmudov linked the performance of the rapidly growing segment to the overall state of the economy:

“As long as there is global liquidity and risk-taking behavior in traditional markets, meme coins will continue to gain strength. However, in the event of a recession, they are likely to come under pressure as well.”

He stated that cryptocurrencies mimic the movements of the traditional market, amplifying any trend two to three times. Meme tokens are a hypertrophied, greatly enhanced reflection of the state of the crypto market.

Analyst Pav Hundal from Sfyftx also believes that “coins that appeared out of nowhere” follow global trends. In his view, this asset class is “nothing more than a risky play on the rest of the industry and the global financial market.”

“All you need to know about the current cycle is that global liquidity is higher, regulatory risk is lower, and I expect the US dollar to weaken,” the specialist emphasized.

Reflecting on the significant growth of many coins, Hundal warned of a possible market overheating and meme fatigue—a “normal phenomenon after a 150% increase.”

He suggested that this niche might face specific challenges:

“It is quite possible to imagine a future where censorship, meme fatigue, or ‘cancel culture’ become risks.”

As an argument, Hundal pointed to a tweet by Binance founder Changpeng Zhao, where he called these assets “weird” and urged building “real applications.”

I am not against memes, but meme coins are getting “a little” weird now.

Let’s build real applications using blockchain.

— CZ ? BNB (@cz_binance) November 26, 2024

OKX exchange’s Chief Commercial Officer Lennix Lai believes that the bull cycle will not so much slow down as “expand,” but the high volatility of meme coins could trigger significant declines amid Bitcoin corrections.

“It should be remembered that in the short term, volatility in the cryptocurrency market will continue: in the coming weeks, BTC is likely to experience a 10-15% pullback, while meme coins may face much sharper price swings,” the expert emphasized.

At the time of writing, the total capitalization of meme coins stands at $138.9 billion—3.6% of the entire crypto market.

In November, the monthly revenue of the Pump.fun platform reached a record $93 million.