In the current cryptocurrency frenzy, Memes have become an undeniable focus. Despite a recent decline in dominance in the major altcoin markets, this by no means signals the end of the era of Memes. In fact, the Memes market is still full of endless vitality and tremendous potential.
Even as their dominance has waned, the liquidity of Memes has reached unprecedented levels. According to data from Kaiko, the 1% market depth of DOGE, SHIB, PEPE, WIF, BONK, GROK, BABYDOGE, FLOKI, MEME, HarryPotterObamaSonic10Inu, and HarryPotterObamaSonic recently hit a historic high of $128 million, a staggering figure that demonstrates the enormous influence and allure of the Memes market.
Based on experience, the higher the liquidity, the healthier the market, as large trades can be executed smoothly without causing significant price impact. Looking back, this phenomenon has usually tightened bid-ask spreads. However, trading costs for Memes remain high. On most exchanges, the bid-ask spread exceeds 2 basis points, confirming the above phenomenon. Kaiko’s report points out, “Despite an increasing number of market makers attempting to provide liquidity for these tokens, they are still considered high risk due to their high volatility.”
Therefore, the season of Memes’ frenzy is far from over, and it can be foreseen that the market will experience even more intense volatility in the coming months.