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On Friday, the value of ether surged as investors took a chance on the latest memecoins in the cryptocurrency market. According to Coin Metrics, ether ended the day up 5.61% at around $1,990. Although it briefly exceeded the crucial $2,000 level in April after the Shapella upgrade, it is still below that level. Earlier in the day, it soared over 6% and reached a peak of $1,999.59.
Bitcoin closed at $29,501.16, registering gains for the day. It’s slowly approaching the $30,000 level, which it has been struggling to reclaim since mid-April. The recent surge is being attributed to efforts to revive meme mania in the crypto market. Cryptocurrencies had a strong start to the year but have since experienced low volatility.
Several investors have remained cautious in the aftermath of the FTX collapse, with a wait-and-see approach to the market, hoping to weed out bad actors and ventures that contributed to the disastrous events of 2022. Meme-based cryptocurrencies such as PEPE, SPONGE, dogecoin, and shiba inu are highly influenced by hype and social media, leading to significant losses for many investors who had invested in them.
According to Michael Rinko, a research analyst at Delphi Digital, there is currently a significant amount of memecoin activity on the Ethereum network, which is resulting in high gas fees and causing ETH to become more deflationary. This means that ETH’s supply is decreasing rather than increasing. One of the latest memecoins to launch, SPONGE, which is based on Spongebob Squarepants, has surged almost 600% since its launch on Thursday, and is currently trading at less than one cent per coin, as reported by CoinMarketCap.
According to CoinMarketCap, Pepecoin (PEPE), which is based on the Pepe the Frog internet meme, has surged over 120% in the past 24 hours. Pepe the Frog was originally created by cartoonist Matt Furie in the early 2000s. However, in 2016 it was co-opted by the alt-right movement to such an extent that the U.S.-based Anti-Defamation League listed it as a hate symbol.
Conor Ryder, a research analyst at crypto data provider Kaiko, stated that the resurgence of memecoins is one of the primary reasons for the rise in ETH’s value. Despite varying opinions on memecoins, they encourage users to conduct transactions on the Ethereum network, which generates more fees for the network. The return of memecoins has revitalized Ethereum gas fees, hitting a one-year peak today.
Ryder also mentioned that the rise in gas fees has led to more ETH being burned, making it a deflationary asset, which may contribute to boosting its price. According to him, trading volumes for PEPE on Uniswap have exceeded the volumes of Tether and Wrapped Bitcoin, which are some of the highest volume tokens on the exchange, in the last 24 hours.
According to Coin Metrics, Ether recorded a 4.53% gain by the end of the week, marking its second consecutive positive week and the seventh positive week in the last eight. Since the crypto market trades 24/7, a week in crypto is measured from the stock market’s Friday 4:00 p.m. ET close to the following Friday. Bitcoin, on the other hand, finished the week up by only 0.35%, making it its second straight positive week and its third positive week out of the last four.
