Memecoins: the profits do not reach small investors
Memecoins attract, but the profits escape from those who buy them. According to a report by Galaxy Research, these tokens, currently booming on Solana, primarily benefit the platforms and trading bots. Far from the community image they project, they fuel a fast market where individual investors, often losers, serve an well-oiled industrial mechanism.
In brief
Memecoins are experiencing a resurgence in popularity, especially on Solana, attracting a wave of new users to crypto.
According to a report by Galaxy Research, most individual traders lose money on these ultra-variable tokens.
The market is dominated by bots, reducing the average holding duration to just a few seconds.
The profits generated by trading memecoins primarily benefit technical platforms like Axiom and Pump.fun.
Memecoins: a minefield for individual investors
While Cathie Wood announced a disaster in the market, the report published on October 1st by Galaxy Research provided clarification on the current dynamics of memecoins.
Behind the apparent popular euphoria, most individual traders end up losing, while the market is largely dominated by automated players. Here are the key indicators revealed by the research:
"Most traders lose money in a short-term gambling-type market," indicates the report. The instability and speed of exchanges make any human strategy ineffective against automated tools.
The average holding duration of a memecoin on Solana is now 100 seconds, down from 300 seconds a year ago. This figure illustrates the rise of bots, capable of buying and selling in just a few milliseconds.