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March 14, 2024Franklin Templeton goes ‘full degen’ with investor note on memecoins
Franklin Templeton, a prominent multinational investment firm, has released an investor note regarding memecoins, acknowledging their lack of inherent value or utility while highlighting their potential for fast gains.
Memecoins’ Characteristics and Appeal
The bulletin, titled “The Value Between Meme Coins and Their Native Networks,” describes memecoins’ price performance as resembling viral internet memes, attributing their recent surge in popularity to their unique nature. Memecoins require minimal technical knowledge, feature low fees compared to other cryptocurrencies, and offer the potential for quick profits despite significant price volatility.
Dogecoin (DOGE), the first and largest memecoin by market capitalization, is singled out for its pivotal role in popularizing memecoins. With a market capitalization of $26 billion, DOGE has garnered attention from figures like Tesla CEO Elon Musk, contributing to its enduring popularity and influence.
Memecoins’ Connection to Native Networks
The investor note underscores the strong relationship between memecoins and their native networks, citing the example of BONK, a Solana-based memecoin inspired by Dogecoin. BONK’s meteoric rise, with a staggering 5,700% increase in value over the past year, exemplifies this connection.
The rise of memecoins has had a significant impact on the crypto market, with their total market capitalization reaching $65.5 billion, representing approximately 23% of the entire crypto market, according to CoinGecko.
Franklin Templeton’s Crypto Ventures
In addition to analyzing memecoins, Franklin Templeton has ventured into the crypto space by applying for a spot Ether exchange-traded fund (ETF) in the United States. However, its spot Bitcoin ETF, the Franklin Bitcoin ETF (EZBC), has experienced slower net capital inflows compared to its competitors, receiving $167 million in inflows to date.
While recognizing the speculative nature of memecoins and their potential for significant gains, investors are advised to approach them with caution due to their inherent volatility and lack of fundamental value or utility.
