According to crypto market analysis, Binance, the world’s largest cryptocurrency exchange, is behind the recent surge in the memecoin market. The support for new coins Pepe and Floki has pushed their values considerably high, leading to a current market capitalization of $1 billion for Pepe. In contrast, Floki has seen a moderate rise of 50% before falling.
Pepe and Floki are relative newcomers to the market, so Binance added them under its so-called “innovation zone,” which marks a dedicated trading area for new, innovative tokens likely to face higher risk and more volatility.
To help traders avoid risks, Binance warns potential Pepe and Floki traders that these coins are still relatively risky. An analyst, Jack Niewold, suggests that top traders might take advantage of this announcement by “dumping” their holdings. He adds that the “exit liquidity still has not shown up yet,” which means the potential dump is still uncertain.
Considering Pepe’s rapid surge, it has “no token utility or value support mechanism,” according to Binance. Pepe, named after the famous “Pepe the Frog” meme adopted by the internet community, has a self-reported circulation of 420.69 trillion, with early investors possibly struggling to turn it into any other cryptocurrency.
The market watchdog at Decrypt also warns against dodgy ‘Flatcoins,’ declaring it as crypto’s inflation-busting fad. The report also reflects a warning from Ethereum’s co-founder, Vitalik Buterin, about a potential crisis worth $540 billion in Bitcoin or cryptocurrency, worse than the 2008 financial crisis.
From the crypto perspective, JPMorgan predicts that the U.S banking crisis might be beneficial to Bitcoin, leading to a price surge past its current value. Additionally, CEO Jack Dorsey’s donation of $10 Million to convert Bitcoin into what he believes should be the “native currency of the internet” has further added support to Bitcoin.
In summary, Binance’s recent move towards Pepe and Floki coins has led to an accelerated surge in the memecoin market, a relatively new entrant in the crypto world. Although these tokens might seem tempting, Binance warns against the high risks for potential traders due to their higher volatility and unestablished support mechanisms.
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The material in this article is written on the basis of another article.