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Author: Vince Quill, CoinTelegraph; Compilation: Wuzhu, Bitchain Vision
Alon Cohen, co-founder of Pump.fun, saidMost tech altcoins have the same value proposition as memecoin, but have low circulation, high full dilution value, and are involved by venture capitalists who are notorious for leveraging retail traders as exit liquidity.
Cohen responded to a post that suggested memecoin’s publishing platform disrupted the altcoin price cycle and said Pump.fun existed a few months ago in the altcoin industry that began experiencing a downturn since April 2024.
“Retail investors suffered too much in the last cycle to be able to return to invest in the ‘future of finance’,” Cohen wrote, explaining the altcoin crash in April 2024.
According to Cohen,“Most people who have daily work don’t care about technology, they care about personal achievements” and want to earn the right amount of money in the transaction while having fun.
Social media exchanges highlight the growing tension between practicality-oriented technology altcoin investors and traders speculating on asset prices without proven use cases.
Total number of transactions deployed on Pump.fun.Source: Dune analytics
Is memes the reason for the low price of altcoins?
Pump.fun was launched in January 2024, and the already thriving meme coin ecosystem was driven by online communities on X (formerly known as Twitter, Reddit, Telegram, and Discord).
The Total3 indicator on TradingView, a measure of the total market value of cryptocurrencies that do not include Bitcoin and Ethereum, shows that the total market value of altcoins hit a local high of approximately $788 billion in March 2024.
However, altcoin prices plummeted in April 2024, and it was not until November 2024 when the cryptocurrency market experienced a historic price rebound after Donald Trump was re-elected in the United States, before hitting new highs again.
The Total3 metric shows the total market value of cryptocurrencies minus BTC and ETH.Source: TradingView
Many analysts point out that the cryptocurrency market is now oversaturated, and too many different currencies are competing for limited market share and capital.
Despite the oversaturation of the market, altcoins with institutional investors tend to perform better throughout 2024 than projects without institutional support.
Yat Siu, co-founder of Animoca Brands, believes that this is because institutions buy digital assets on the open market, rather than closing sales, and helping to support prices.
