Dogecoin, Shiba Inu Continue To Drive High Trading Volume, Report Finds

Meme coins remain a major force in the cryptocurrency market and drive major trading volume, according to a new research report.

What Happened: The Coinmetrics report highlights that meme coins, including popular tokens like Dogecoin DOGE/USD and Shiba Inu SHIB/USD, have garnered substantial attention, achieving $13 billion in trading volumes over a seven-day period in March.

This surge surpasses major assets such as Ethereum ETH/USD and Solana SOL/USD, indicating a shift in investor interest towards more speculative digital assets, according to the report co-authored by researchers Tanay Ved and Matías Andrade, Bitcoin.com reported.

Ved and Andrade point out that decentralized exchanges (DEXs) are crucial in supporting this growth by offering the necessary infrastructure for asset trading and liquidity.

According to Coinmetrics, the rapid ascent of meme coins can be linked to their cultural appeal and community-driven origins.

These tokens, often infused with humor and references to popular culture and political figures, have carved out a unique niche in the crypto market.

The researchers suggest that future developments in the meme coin sector could transform the broader financial landscape.

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Why It Matters: However, they caution that the concentration of ownership among ‘whales’—large holders of these tokens—poses risks such as market manipulation and liquidity challenges.

This highlights the need for careful investment in this highly volatile sector.

"The high Gini coefficient of ~0.8 indicates a substantial centralization of token holdings, posing risks such as market manipulation and liquidity issues, in addition to a degree of volatility that is intolerable for most investors," the Coinmetrics report states.

As meme coins continue to attract attention, they offer new opportunities for investors ready to embrace their speculative nature.

Nevertheless, the researchers stress the importance of understanding the inherent risks, including extreme price volatility and the potential for rapid market changes driven by social media and community hype.

What’s Next: These insights into the evolving meme coin market will be a key topic at Benzinga’s Future of Digital Assets event on Nov. 19.

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