Virtual Assets Created Using Trending Photos and Videos
Low Trading Volume and Price Require Caution Due to Sharp Volatility
Recently, meme coins have shown a remarkable upward trend in the virtual asset market. In particular, a meme coin related to the superconducting material candidate 'LK-99' has emerged, attracting market attention. Meme coins are virtual assets created using popular images or videos circulating online, issued primarily for entertainment purposes. A representative meme coin is Dogecoin, which has maintained a continuous association with Elon Musk, CEO of Tesla.
According to CoinMarketCap, a global virtual asset market tracking site, as of 12:38 PM on the 14th, the meme coins with the highest price increases over the past week were Cat (224.95%), Unleash Club (118.52%), Bold (97.77%), Bad Idea AI (86.01%), AI-X (80.15%), and Todd Killer (53.63%). Pepe Coin, ranked 71st in market capitalization among all virtual assets, also surged more than 15% over the week, while Shiba Inu, ranked 14th, rose over 10%.
The recent sharp rise in meme coin prices is interpreted as a result of investors seeking profits through thematic materials amid the sideways movement of major virtual assets like Bitcoin. In particular, Shiba Inu's price increased after the project team announced plans to add digital identities capable of identifying individuals or devices online within its ecosystem development.
Additionally, as interest in the superconducting material candidate 'LK-99' discovered by domestic researchers grew, the related meme coin LK99 also appeared. LK99 is not currently listed or traded on centralized virtual asset exchanges such as Binance or Upbit, but individuals are trading it on decentralized exchanges (DEX). Unlike centralized exchanges (CEX), decentralized exchanges allow peer-to-peer (P2P) trading without intermediaries or middlemen.
However, caution is advised as meme coin prices can fall if their hype diminishes. For example, when Musk, who acquired Twitter, announced plans to change the logo, Dogecoin prices surged. In April, when Twitter's logo was temporarily changed to the Shiba Inu dog symbolizing Dogecoin, its price rose by more than 35%. On the 26th of last month, Dogecoin was trading above $105, but after the logo was finalized as 'X,' the price declined and is currently trading around $99.
Moreover, most meme coins have low market capitalization, trading volume, and prices, which can lead to extreme volatility. While volatility can be attractive to investors, it also increases the risk of significant losses. For instance, Cat, which recorded the highest weekly price increase among meme coins, rose over 200% but was still trading at around $0.00000000070. Its 24-hour trading volume was only $1.42 million (approximately 1.9 billion KRW). LK99 was traded on the decentralized exchange Uniswap at $0.000000049, down 17.15%.
There have also been frequent cases of so-called 'rug pulls' related to meme coin investments in the past. This is a tactic where developers sell large amounts of coins at once after the price rises due to hype. For example, the developer of Jin Dogecoin, a Dogecoin derivative meme coin, sold 15% of the total supply at once, causing the price to plummet nearly 97%. Additionally, Squid Coin, based on the Netflix drama 'Squid Game,' soared to 3.4 million KRW but crashed 99.99% after the developers abandoned the project and cashed out.
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