Has Avalanche’s decision to support meme coins backfired?

• The Avalanche Foundation’s decision to invest in meme coins has been met with criticism.
• The price of AVAX fell significantly as short positions taken grew.

Avalanche [AVAX] has witnessed a surge in interest over the last few weeks. To capitalize on this surge in interest, Avalanche adopted an unconventional strategy.

Meme-ing around

The Avalanche Foundation, known for backing the development of the Avalanche blockchain ecosystem through grants and investments, intends to acquire meme coins.

This initiative acknowledges the diverse niches within the cryptocurrency market, spurred by the recent surge in tokens like Bonk [BONK], which significantly boosted activity on the Solana [SOL] network earlier this month.

The decision faced a significant backlash within the cryptocurrency community. Responding to concerns, Avalanche founder Emin Gün Sirer addressed the criticism in a tweet.

The people trying to fade memecoins are the same kind of people who were fading pop music in the 60s, calling Banksy a vandal in the 80s, and shittalking rap in the 90s.

— Emin Gün Sirer (@el33th4xor) December 29, 2023

A timely response

He compared those criticizing meme coins to individuals who dismissed pop music in the 60s, labeled Banksy as a vandal in the 80s, and criticized rap in the 90s.

Sirer emphasized Avalanche’s strong institutional activity, distinguishing it from coins making promises without delivery.

He commended the Avalanche Foundation’s vision in supporting meme coins, acknowledging the cultural significance of these coins as social signaling mechanisms.

While Sirer initially had reservations about meme coins, he now recognizes their value as cultural expressions.

He emphasized that a coin doesn’t need a roadmap or complex promises to be legitimate; it can simply be owned for personal preference and social signaling.

Sirer cautioned about the volatility of meme coins, advising careful consideration due to their unpredictable nature in an already volatile market.

Drawing parallels with his past recommendation of Dogecoin in 2015 for its fun and experimental appeal, Sirer highlighted the importance of meme coins retaining their enjoyable and entertaining aspects to remain valuable.

Read Avalanche’s [AVAX] Price Prediction 2023-24

AVAX bleeds

However, the markets didn’t share the same enthusiasm as Emin. In the last 24 hours, the price of AVAX fell by 8.17% and was trading at $38.61. Due to the price of AVAX plummeting, the number of short positions taken against AVAX had grown.

At press time, the percentage of short positions taken against was 53.41%. Only time will tell whether the meme coin development will aid AVAX in spoiling the bears’ plans.

Source: Santiment