TL;DR
- A viral meme coin experienced a significant increase following the launch of perpetual contracts for it by Binance.
- The exchange is enhancing its meme coin offerings, having recently added Baby Doge Coin, Turbo, and Neiro to its listings.
A Noteworthy Surge
Meme coins are characterized by their heightened volatility, often experiencing significant price swings following notable events. The latest case illustrating this phenomenon is the dramatic price increase of Simon’s Cat (CAT).
The meme coin, inspired by the well-known animated series and launched on the Binance Smart Chain, experienced a 65% increase within a day, bringing its market cap close to $250 million.
This surge was driven by Binance’s announcement to introduce 1000CATUSDT perpetual contracts within its futures offerings. This feature went live on October 21 and offers up to 75x leverage, allowing traders to engage with the contract using various margin assets.
“For instance, when the Multi-Assets Mode is enabled, traders can utilize BTC as margin when engaging with the perpetual contract mentioned earlier,” the company stated.
Perpetual contracts enable traders to speculate on the price changes of a token without owning it. These contracts lack an expiration date and can be maintained indefinitely. Although these contracts present the potential for substantial profits, the high degree of leverage and the constant risk of liquidation render them inherently risky, particularly for novice traders.
Binance’s Approach to Meme Coins
The largest cryptocurrency exchange has recently been very receptive to the meme coin segment, expanding its range of services related to these assets.
Recently, it broadened its offerings on Binance Spot by incorporating trading bot services for PEPE/FDUSD. The exchange first began supporting the frog-themed coin in May of last year.
Last month, Binance added three more meme coins to its platform: Baby Doge Coin (BABYDOGE), Turbo (TURBO), and Neiro (NEIRO). Their prices soared shortly after the announcement, with NEIRO experiencing the most dramatic increase, skyrocketing by 500% within 24 hours.
It’s important to note that Binance has introduced the meme coins with seed tags. Tokens in this category signify “innovative projects that may exhibit greater volatility and risks” compared to other listed assets. The exchange urges users to perform thorough research before entering the market.
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