Comparison of NFT and Memecoin Development in Previous Bull Markets vs. the Current Bull Market
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Comparison of NFT and Memecoin Development in Previous Bull Markets vs. the Current Bull Market
Explore market dynamics of Memecoins and NFTs in current and previous bull markets.
Navigating Web3 tides with focused insightsWritten by: Neptune Mutual
Translated by: Baicai Blockchain
In recent years, memecoins and NFTs have emerged as standout assets in the crypto world.
Memecoins—cryptocurrencies inspired by internet memes—have gained significant attention and amassed millions of followers. Their price surges are largely driven by community support and social media buzz. On the other hand, NFTs (non-fungible tokens) are blockchain-based digital assets representing ownership of unique items such as art, music, or collectibles. Unlike memecoins, NFTs typically offer some utility within their ecosystems.
Bull markets, known for rising prices, play a crucial role in asset growth. During bull runs, investors are more willing to take risks on novel assets, leading to a surge in popularity and value for both memecoins and NFTs. This environment fosters innovation and brings broader audiences into the space, highlighting both their potential and inherent risks.
In this article, we’ll explore the dynamics of memecoins and NFTs during the previous bull market versus the current one.
1. Memecoins in the Previous Bull Market
During the previous bull run from 2020 to 2021, institutional adoption of Web3 became widely recognized. Bitcoin broke past its prior highs, reaching $64,000. This surge marked a shift in user sentiment, sparked speculative behavior, and led many institutions and organizations to adopt cryptocurrencies.
At this stage, memecoins like Dogecoin and Shiba Inu rose to prominence in the crypto space. Their prices soared to extraordinary levels, fueled by social media frenzy and retail investor FOMO (fear of missing out).
Originally created as a joke in 2013, Dogecoin gained serious traction in 2021. Its price surged by 3,300%, making it the tenth-largest cryptocurrency by market cap. It reached an all-time high of $0.731 in May 2021, largely due to endorsements from celebrities like Elon Musk and Mark Cuban.
Shiba Inu, often dubbed the “Dogecoin killer,” rode on Dogecoin’s momentum and the growing meme culture. Platforms like Reddit, Twitter, and TikTok played a key role in spreading memes, generating viral interest, and driving up prices.
Many investors treated these coins like lottery tickets, hoping to profit from short-term gains rather than long-term investment. Media coverage had a strong influence, amplifying price volatility through sensational headlines and viral tweets.
2. Memecoins in the Current Bull Market
The current bull market began around April 2024, with new memecoins like PEPE gaining popularity alongside earlier meme-inspired cryptocurrencies. Based on the “Pepe the Frog” meme, PEPE quickly captured attention due to its playful concept and active community.
Market dynamics have shifted—investors have become more cautious. Rather than blindly chasing any memecoin, they now focus on a coin’s potential use case, community strength, and financial model. Compared to earlier periods, this has made the memecoin market more stable.
Investor sentiment also appears to have evolved. Interest is no longer solely on quick profits but extends to long-term prospects and community engagement. Memecoin communities have grown stronger and more proactive in promoting their projects, sometimes even launching real-world initiatives and events.
Despite increased vigilance, investors have still fallen victim to multiple memecoin scams. Take, for example, the rug pull attack by CONDOM on NORMIE.
3. NFTs in the Previous Bull Market
During the last bull market, NFTs (non-fungible tokens) surged in popularity, becoming a major trend in the crypto world. While NFTs were first introduced publicly after being standardized via EIP-721 in 2017, that year was primarily experimental. The launch of Cryptopunks and CryptoKitties stood out at the time, helping shape the early NFT ecosystem.
Exponential growth for NFTs occurred during the 2020–2021 bull run. Key trends included the rise of digital art and collectibles. Platforms like CryptoPunks and Bored Ape Yacht Club became extremely popular, offering users digital avatars they could own and trade. These NFTs often served as status symbols and collectibles within digital communities.
The market grew rapidly, driven by the novelty of owning digital assets and the ease of trading them on blockchain platforms. Media coverage and celebrity endorsements boosted public interest, bringing NFTs into the mainstream and encouraging wider exploration of this new form of digital ownership.
High-profile sales made headlines, with some NFTs selling for millions of dollars. Beeple’s digital artwork *Everydays: The First 5000 Days* sold for a record $69.3 million in March 2021. In 2021 alone, approximately $41 billion worth of cryptocurrency was spent on NFT markets, showcasing their rapid rise and massive market interest.
On the security front, Stazie lost about $1 million in August 2021 due to a phishing scam. Iconics, Evolved Apes, Bored Bunny, and Frosties were among the fraudulent projects manipulated after the bull market.
4. NFTs in the Current Bull Market
After the previous bull run, the NFT market experienced a sharp decline, culminating in the 2022 NFT crash. Many NFTs, including popular collections, underperformed and hit rock-bottom prices.
While there was renewed interest around 2023, the NFT market may only partially recover during the 2024 bull run. We are unlikely to see the same level of hype and explosive chart movements as in 2021.
A key development in the current bull market is the evolution of NFTs, expanding into gaming, the metaverse, and sports. This enables players to own and trade unique items in virtual worlds and games. Likewise, traditional brands entering the NFT space have provided a boost. For instance, Starbucks launched its first paid NFT collection in March 2023, selling 2,000 digital stamps at $100 each—all within just 20 minutes.
Pudgy Penguins exemplifies a current NFT project making waves. Though launched in August 2021, it gained the most traction in early 2024. These PFT-themed artworks surged in popularity due to their appealing aesthetics and strong community.
In summary, investor attitudes are maturing, with greater emphasis now placed on the practical benefits of NFTs rather than speculative trading. Additionally, there are now many smaller, more affordable NFT projects with real utility, contrasting with 2021’s focus on a few high-value collectibles.
The sector still faces challenges such as rug pulls, phishing attacks, smart contract vulnerabilities, and DeFi wallet issues, all of which can undermine user confidence. For example, a phishing attack on OpenSea in September 2023 highlighted critical security concerns.
Similarly, MetaDragon is a recent case of a hack caused by a smart contract vulnerability.
5. Comparative Analysis
Comparing the last and current bull markets reveals both similarities and differences in the behavior of memecoins and NFTs.
Across both periods, memecoins like Dogecoin and PEPE heavily rely on social media hype and community support to drive interest and price increases. However, today’s investors are more cautious, evaluating long-term value and community engagement rather than simply chasing trends.
NFT trends have also shifted. The era of million-dollar sales and widespread enthusiasm for NFTs as collectibles has cooled. Today, NFTs emphasize utility—in gaming, the metaverse, and integration with traditional brands—leading to more balanced growth and a greater number of practical, use-driven projects.
On security, both markets have faced hacks and fraud, resulting in millions in losses. Across both bull runs, scams, phishing, and smart contract exploits have been leveraged against digital assets. Addressing these threats is critical to maintaining investor confidence.
Legitimate memecoin and NFT projects continue strengthening defenses through smart contract audits and vulnerability fixes. As a user, you should remain vigilant and check for potential red flags in projects. Reviewing community sentiment and user feedback can be helpful.
Moreover, using multi-signature wallets (requiring multiple approvals for transactions), advanced consensus mechanisms, and hardware security modules is essential for building more secure infrastructure.
For owners of digital assets, another effective protection method is considering DeFi insurance. It offers financial protection against losses caused by hacks, exploits, or other unexpected security breaches.
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