Author: Vince Quill, CoinTelegraph; Compiler: Wuzhu, Golden Finance
Pump.fun co-founder Alon Cohen said that most tech altcoins have the same value proposition as memecoins, but with low circulation, high fully diluted value, and involvement from venture capitalists, who are notorious for using retail traders as exit liquidity.
Cohen responded to a post suggesting that memecoin launch platforms disrupt altcoin price cycles, and said that Pump.fun existed months before the altcoin industry experienced a downturn starting in April 2024.
"Retail investors suffered too much in the last cycle to come back to invest in the 'future of finance,'" Cohen wrote, explaining the April 2024 altcoin crash.
According to Cohen, “most people with day jobs don’t care about technology, they care about personal fulfillment” and want to make a modest amount of money trading while having fun.
Social media exchanges highlight the growing tension between technical altcoin investors who value utility and traders who speculate on asset prices without proven use cases.
Total number of transactions deployed on Pump.fun. Source: Dune analytics
Pump.fun was launched in January 2024, amid an already thriving memecoin ecosystem driven by online communities on X (formerly known as Twitter, Reddit, Telegram and Discord).
The Total3 indicator on TradingView, a measure of the total market capitalization of cryptocurrencies excluding Bitcoin and Ethereum, shows that the total altcoin market capitalization hit a local high of around $788 billion in March 2024.
However, altcoin prices plummeted in April 2024, and did not reach new highs again until November 2024, when the cryptocurrency market saw a historic price rally following the re-election of Donald Trump in the United States.
The Total3 indicator shows the total cryptocurrency market cap minus BTC and ETH. Source: TradingView
Many analysts have pointed out that the cryptocurrency market is now oversaturated, with too many different currencies competing for limited market share and capital.
Despite the oversaturation of the market, altcoins with institutional investors tended to perform better than projects without institutional support throughout 2024.
Animoca Brands co-founder Yat Siu believes this is because institutions are buying digital assets on the open market, rather than closed sales, and helping to support prices.
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