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Memecoin-action of Franklin Templeton: Investment Firm Evaluates the Degen Crypto

Wall Street giant takes a closer look at memecoins

Franklin Templeton, a titan in asset management, casts a spotlight on the speculative world of memecoins. In their investor note dated March 14, titled “The Value Between Meme Coins and Their Native Networks,” the firm draws a parallel between the viral nature of internet memes and the price performance of memecoins, stating: 

“memecoin price-performance was akin to a meme going viral on the internet.” 

Franklin Templeton points out their unique market position, where despite having “no inherent value or utility,” memecoins offer the tantalizing prospect of swift financial gains.

Highlighting the accessible nature of memecoins, the note explains:

“memecoins require little technical knowledge, have low fees compared to other cryptocurrencies, and have the potential for quick profits but have a lot of price volatility.” 

Dogecoin (DOGE), recognized as the pioneering and largest memecoin by market capitalization, serves as a prime example within the discourse. Citing DOGE's significant market presence and Elon Musk’s endorsements, the note underscores the token's capacity to influence the memecoin sector profoundly.

The market influence of memecoins: from Dogecoin to BONK

Franklin Templeton's deep dive into memecoins doesn't stop at Dogecoin. The investment firm highlights the emergence of BONK, the first dog-related memecoin on the Solana blockchain, as a testament to the expansive and dynamic nature of the memecoin market. BONK's staggering growth, "skyrocketed more than 5,700% over the past year," exemplifies the volatile yet potentially lucrative nature of these digital assets. This surge was further amplified by a "Learn and Earn Campaign" launched by European fintech firm Revolut in February, propelling BONK to an all-time high in early March.

The firm's commentary on the memecoin ecosystem sheds light on the broader cryptocurrency market, noting the total market capitalization of all memecoins stands at $65.5 billion, accounting for about 23% of the entire crypto market, as reported by CoinGecko. This significant figure underscores the substantial impact memecoins have within the digital currency space, challenging traditional notions of value and investment.

 

Furthermore, Franklin Templeton's engagement with the cryptocurrency market extends beyond memecoins. The company's application for a spot Ether ETF in the United States, alongside the launch of its spot Bitcoin ETF, the Franklin Bitcoin ETF (EZBC), marks its strategic investment in the crypto sector. Despite facing stiff competition with just $167 million in net capital inflows to date for EZBC, Franklin Templeton's foray into cryptocurrency investment products illustrates a broader acceptance and interest in digital assets among traditional investment firms.