Which currency will outperform the next cycle?

Meme coins like Dogecoin, Shiba Inu, Floki and PEPE have undoubtedly been one of the best and at the same time riskiest ways to make a lot of money in the cryptocurrency market in recent years and months. But how will the landscape for meme coins change in the next bull cycle? Two well-known cryptocurrency analysts presented their theses for the battle of the meme currency giants.

First, the analyst points to the underwater thesis, which refers to the percentage of all cryptocurrency holders and their profit/loss ratio. The theory states that if more holders are “submerged”, i.e. at a loss, the selling pressure on the rise will be greater because more investors will dump their coins (at breakeven).

As Deutscher notes, fewer PEPE holders are currently underwater compared to Dogecoin holders. This means that PEPE holders will have less selling pressure on the upside. Also, lower multiples are needed to reach the previous all-time high (2.8x vs. 12x).

Another argument in favor of PEPE according to Deutscher is: “People are more tired with the DOGE meme, Pepe feels fresher and generally more organic / appreciated as a meme”. In addition, less capital is also required to increase the price of the frog coin. The 14 times discrepancy in terms of market capitalization means that much less liquidity is needed to move the price against the DOGE.

According to the analyst, there is no reason to invest in any of the imitators when they are no longer the fashion of the month. “Shib, Pepe, Floki, etc. all destined to tend towards 0 in the Doge proportion”.

According to Deutscher, the thought experiment is super interesting. In response to Tree of Alpha, he added that DOGE has even more arguments. For example, the first of all meme coins is a proof-of-work (PoW) coin and is therefore protected from enforcement actions by the US Securities and Exchange Commission.

Furthermore, Dogecoin has been around since 2013, “it is even older than Tether. PEPE is still an open question” and is the one with the most listings and brand recognition. Other users also added that Dogecoin even has one of the most notable supporters in Elon Musk.

However, Deutscher maintains his thesis for PEPE. It is important to note, however, that the analyst does not believe that PEPE will “overtake” (surpass) DOGE in the ranking by market capital. Incidentally, Deutscher expects “the next major-alt season” with the Bitcoin Halving in early 2024.

On a weekly basis, PEPE has been the clear winner between the two meme currencies so far. While PEPE has risen 71.4% over the past seven days, DOGE has only managed to gain 7.3%. Dogecoin still needs to break the resistance at $0.069 to avoid the risk of further price breakthroughs in the south.

Binance Featured Image, Chart from TradingView.com

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