Recent data from Santiment’s fee distribution metrics reveals an intriguing trend in the cryptocurrency market as various memecoins outpace established stablecoins like USDT and USDC in gas consumption. Santiment also stated that this unusual event, which is frequently tied to speculative trading, has raised questions about the underlying causes of the spike in gas prices.
Memecoins Spikes In Gas Fees
Meme coins’ increased gas use can be related to their high volatility, which confuses and fuels speculation among traders. Notably, meme coins like Shiba INU have been at the forefront of this trend. Anticipation was high for the launch of Shibarium, an L2 scaling solution by Shiba Inu, and people expected significant price recovery for the coin. Despite its successful implementation, the native token’s price saw only a modest 2.67% increase since last week, leaving traders uncertain about the impact of Shibarium.
Dogecoin, another well-known meme coin, has also faced fluctuating gas fees and price volatility, often influenced by Tesla CEO Elon Musk’s tweets and comments. Recent studies highlight that Dogecoin’s value plummeted to $0.07529 during a broader market correction in August 2023, but rebounded to $0.061963 later in the month, showcasing the rapid and speculative nature of the meme coin. Dogecoin’s price is now trading at $0.06307.
Among the meme coins gaining attention, the Pepe coin has taken the spotlight. Discussions about a substantial move by its developers have increased interest in it. Santiment, the on-chain analytics firm, pointed out that Pepecoin became the top trending crypto topic after news broke about the developers moving a substantial 16 trillion Pepe tokens for sale on exchanges. The firm also warned about even more price volatility in the future. Pepe coin price is now trading at $0.0000008378.
Also Read: Crypto Prices Today: Bitcoin And Major Altcoins Gaining Momentum, Pepe Coin Fails Price Recovery
Increased Transaction Results To High Gas Fees
According to market perception, meme coins’ attractiveness comes from their potential for quick returns, drawing in both novice and seasoned traders. However, this speculative nature also introduces risk as well as a high number of transactions, which results in increased gas use.
Meme coins, which are frequently attributed for their speculative appeal, are especially vulnerable to significant price swings. These digital currencies, such as Shiba INU, Dogecoin, and Pepe coin, entice traders with the prospect of significant gains in a short amount of time. This causes a rise in transactions, which ultimately causes a rise in gas consumption. Meme coin prices are prone to volatility, which is generally attributed to elements like market mood, breaking news, social media fads, and even celebrity endorsements.
Also Read: Hedera Drives Launch of Asia’s First Digital Carbon Registry, GCR