Memecoins rally as Bitcoin recovers to all-time high

After nearly three years, Bitcoin (BTC) has briefly recovered to its all-time high above $69,000 on March 5.

“This is a truly historic moment for the asset and the crypto industry as a whole,” said Kraken managing director Jonathan Miller in an email to Cointelegraph, adding:

“A combination of factors has sparked excitement around this asset class and contributed to Bitcoin achieving this landmark: the recent US spot Bitcoin ETF approvals, renewed focus on the upcoming [Bitcoin] Halving event, and a wave of interest in crypto more broadly as mainstream attention has returned.”

Similarly, Bitcoin’s 56% year-to-date gain has ignited interest in various memecoins. According to data compiled by Ryan Lee, chief analyst at Bitget Research, altcoins such as Floki and Babydoge have returned anywhere between 80% to 289% in the past week alone, with an 840% increase in trading volume during the same period.

“The rapid rise of assets such as Bitcoin and Ethereum has resulted in a spill-over effect, propelling the entire meme sector upwards,” said Lee. “One significant factor contributing to the surge in these memecoins is their deployment on Ethereum and Solana chains, typically priced in ETH and SOL on decentralized exchange platforms. The upward trend in ETH and SOL prices consequently drives the price appreciation of meme coins.”

The same day, Solana memecoin dogwifhat (WIF) saw a wild run-up in anticipation of its Binance listing, with a gain of 400% in the past week alone. According to blockchain analytics firm Lookonchain, one trader allegedly made $4.3 million on WIF by spending 20 Solana ($1,156) on Nov. 24, 2023, four days before WIF went online.

We found that @blockgraze made ~$4.36M on $WIF with only 20 $SOL($1,156), a gain of 3,773x!

He spent 20 $SOL($1,156) to buy 7.4M $WIF on Nov 24, 2023 (4 days after $WIF went online).

Then sold 5.06M $WIF for $1.09M, with 2.35M $WIF($3.27M) left. pic.twitter.com/klMEzjXU66

— Lookonchain (@lookonchain) March 5, 2024

Despite high prices, development activity continues to heat up within the Bitcoin ecosystem. As told by Bitcoin venture capital fund 9.Bit, one prominent layer-1 solution on Bitcoin, Bitmap, has created a BRC-420 metaverse protocol native to the network.

“After purchasing bitmap land, users can buy avatars, pets, game assets, background music from the BRC-420 Marketplace and use them in Bitmap apps,” developers wrote. Another feature created by Bitmap, Merlin Chain, allows BRC-420 assets to be swapped between nonfungible and fungible tokens. The project currently has a market capitalization of $180 million. 

Related: What the Bitcoin halving means for the network’s energy consumption concerns