Cryptocurrency prices are doing well this year, helped by the strong inflows in spot Bitcoin ETFs like those by Blackrock, Fidelity, and Ark Invest. Combined, all spot Bitcoin ETFs have over $60 billion in total assets.
FOMO in the crypto industry
They have also jumped sharply because of the Fear of Missing Out (FOMO) among investors. FOMO has pushed more people to high-flying cryptocurrencies as the fear and greed index continues moving to the extreme greed zone.
This crypto bull run has also been powered by the demand of meme coins like Dogwifhat, Book of Meme, Pepe, and Bonk. These tokens have grown so much that the combined market cap of all meme coins has jumped to over $63 billion.
Meme coins, unlike other cryptocurrencies like Bitcoin, Ethereum, and Solana do not have any utility. Instead, their price action is usually driven by hype among traders, who love them because of their extremely low prices.
However, a closer look at the crypto industry shows that many zombie coins are also doing well. A zombie coin is defined as a cryptocurrency that aims to have a utility but one that is not widely used by developers and users.
Ripple, Cardano, and other zombie tokens
Ripple’s XRP is the biggest zombie coin in the world with a market cap of over $34 billion. This makes it bigger than many well-known companies like RH, Boston Properties, Walgreens, and State Street.
Ripple’s goal is to simplify the money transfer process. The goal is to have companies like banks use its On-Demand Liquidity (ODL) and XRP to move money in an easier and cheaper approach. But few companies are using this technology.
Also, there are better ways of achieving this, including using stablecoins and other tokenized assets. As a result, according to Forbes, Ripple’s network fees stood at less than $600k in 2023.
Cardano is the second-biggest zombie coin with a market cap of over $20 billion. The network, which was created by Charles Hoskinson, aims to be a great alternative to Ethereum. But many years after its creation has seen little interest from developers.
Cardano has a total value locked of $564 million and is not making any substantial money. It had network fees of less than $3 million in 2023.
The other top zombie coins in the crypto industry are Algorand, Tezos, and Stellar. Algorand has seen no interest from developers and has a TVL of just $263 million. The same is true with Tezos, which has spent millions sponsoring the likes of Manchester United and Red Bull Racing.
Read more: How to buy Stellar Lumens.
These zombie coins have surged hard because of three main reasons. First, most of them were created by highly popular people in the crypto community. Charles Hoskinson, the founder of Cardano, was a co-founder of Ethereum. As such, people believe that his vision will help push the ecosystem higher.
Second, most of these coins were among early players in the industry, meaning that they are offered by almost all exchanges. This makes it easy for people to buy them, which explains why many of them have many holders.
Finally, these zombie coins are soaring because of the general correlation in the crypto industry. In most cases, cryptocurrencies tend to rally when Bitcoin is in a strong bullish trend.
Therefore, in theory, shorting these tokens would make sense. However, in practice, it is a dangerous situation because the uptrend may continue.
