How pygmy hippo Moo Deng revived the meme coin market

During the past summer and early September, the meme coin market, which had seen a meteoric rise earlier this year, was predicted to follow the same downward path as the NFT bubble. However, it appears that for now, the market has been saved by a pygmy hippo named Moo Deng from Thailand.

Images of the then two-month-old hippo, living at the Khao Kheow Open Zoo in Si Racha, Chonburi, Thailand, went viral online in September. This inspired someone to launch the Moo Deng (MOODENG) meme coin on the Solana (SOL) blockchain using the largest meme coin launchpad, Pump.fun, thereby capitalizing on the internet trend.

While the creators of the project remain anonymous, the attempt has been successful. In less than a month, the coin's price surged by 609%. Cybernews.com reported about a meme coin trader who turned an $800 investment in MOODENG into $10 million but then held on too long and saw it drop to $5 million. Some industry observers speculate that this trader may be an insider involved with the project.

Regardless, MOODENG’s rally in late September revitalized the entire meme coin market.

While the list of top 10 meme coins by market capitalization varies depending on the data provider, some of the largest coins saw astonishing price increases of over 6,000% in the past 30 days.

Though such massive gains are rare, other meme coins still experienced double-digit growth. In comparison, bitcoin (BTC), the largest and most established cryptocurrency, rose only 13% in a month – outperformed by many meme coins with no practical utility.

While some may confuse BTC with meme coins, these are distinct crypto assets. You can learn more about meme coins in our previous article.

However, looking at the performance since January this year, there is more red in the picture.

The Pump.fun platform also saw a surge in activity in the past few weeks. However, newer meme coin launchpads like Grafun and SunPump experienced a sharp decline.

Some celebrities also jumped on the meme coin bandwagon. Grammy-nominated rapper Ty Dolla $ign said he invested $500,000 in a meme coin, while Cardi B was involved in her own meme coin project, which reportedly saw $500,000 worth of tokens dumped by insiders within 12 hours of its launch.

However, this month-long rally, which saw thousands of new meme coins flood the market, has cooled in the past week, with many coins losing value – along with the usual scams and rug pulls.

Potential for gambling

Analyzing trends in the meme coin market, industry participants and observers estimate that despite its controversial nature, this sector has the potential for further growth, offering the possibility of immense profits for the lucky while leaving others without their invested capital.

Chris Burniske, a partner at the crypto venture capital firm Placeholder, predicts that meme coins will “be bigger than we expect in the expansion ahead” and could surpass the cultural relevance that some NFT (non-fungible token) collections achieved in 2021. According to Burniske, this phenomenon is driven by meme coins' ability to captivate people emotionally.

However, Burniske also warns that this market “will crash horrendously at the end of the next expansion.”

As in all markets, opinions on the future of meme coins remain mixed.

The meme coin market seems to have found a new advocate in Murad Mahmudov, once known as “one of the highest-conviction bitcoin maximalists” and former head of the crypto hedge fund Adaptive Capital, which shut down in 2020.

Mahmudov has resurfaced as a meme coin enthusiast. His presentation on meme coins at the Token2049 conference in Singapore this September went viral on Crypto Twitter (the community of crypto enthusiasts on X, formerly Twitter).

Mahmudov argues that the current meme coin cycle is driven by factors such as "massive over-production of tokens," "extremely inflated" altcoin valuations, and the crypto market's tendency to prioritize hype over a crypto project's revenue.

According to Mahmudov, these tokens, besides offering potential profits, provide retail investors with what they truly seek – entertainment and a sense of community. The success stories of huge gains further attract new participants, helping to create "cults."

“You work in an industry that is speculation-first, tech-second,” Mahmudov asserts, calling meme coins “a spiritual reincarnation of the 2017 ICO [Initial Coin Offering] wave, but in a new form.”

Why meme coins are better than altcoins, according to Mahmudov:

Mahmudov’s perspective is not without controversy. Recently, pseudonymous blockchain investigator ZachXBT revealed 11 wallets allegedly linked to Mahmudov holding $24 million in meme coins.

In response to criticism for revealing the wallets, ZachXBT defended his actions, arguing that since Mahmudov is making bold predictions about certain meme coins while controlling a large supply, “people deserve to make more informed decisions about the coins they buy.” Mahmudov currently has nearly 200,000 followers on X.

Mahmudov’s former business partner at Adaptive Capital, prominent bitcoin analyst Willy Woo, also reminds us that this industry isn’t all fun and games (or dogs, cats, frogs, and now hippos). According to Woo, on one side of the meme coin trade are highly intelligent individuals who strategically front-run and dump tokens on less experienced investors, who serve as their “exit liquidity.”

Meanwhile, the MOODENG token, which sparked the recent revival of the meme coin market, has dropped by more than half since its all-time high on September 28th, though it still retains a 600% gain for now, serving as a reminder that memes and coins can be a volatile combination.