Pseudonymous trader signalXBT shared a strategy for investing in meme coins, following their explosive growth in popularity among cryptocurrency insiders.
What Happened: On Tuesday, April 2, signalXBT posted on social media about the importance of focusing on coins that surpass their initial pump all-time high (ATH).
Only 1% of newly launched meme coins clear this hurdle, signalXBT says. By focusing on this small percentage, investors can reduce the number of losses and invest more into winners.
See Also: Dogecoin Set to Surge Over 200%, Says Crypto Analyst: ‘It’s Going To Do Something Insane This Cycle’
In another tweet, the trader provides a strategy for growing a small stack with meme coins on Solana by taking advantage of power laws and being early in the market.
He emphasizes maintaining a consistent initial bet size, taking profits early, adding to successful investments and selling when the market structure breaks.
This advice comes in the wake of several meme coins experiencing significant growth shortly after their launch. For instance, Ansem's Cat, a meme coin named after the cat of Solana influencer and trader Ansem, reached a valuation of almost $100 million within the first 24 hours of its launch.
Similarly, CHUCK, a meme coin built on Ethereum, surged 25,800% in value only hours after its launch.
Why It Matters: The rise of meme coins has been a hot topic in the cryptocurrency world.
BitMEX co-founder Arthur Hayes has cautioned against dismissing all meme coins as "stupid,” suggesting that they may hold value.
SignalXBT’s advice provides a potential strategy for navigating the volatile meme coin market.
With meme coins like Ansem’s Cat and CHUCK making significant strides shortly after launch, signalXBT’s advice could prove beneficial for investors looking to tap into the meme coin market. However, as with all investments, caution and thorough research are advised.
What’s Next: The rise of meme coins and their interplay with altcoin investments are topics expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
Image: Unsplash
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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