Memecoins
It’s not just Degens, institutions also like Memecoins
In a report released by Bybit on June 4, memecoins have become highly valued assets for institutions on its platform, reflecting the same elsewhere. Beyond the attractive characters supported by particular users, meme coins represent the ability to quickly multiply wealth, especially during bull runs. The institutions are completely supportive.
According to the report, institutional interactions with memecoins through spot holdings increased by 226% in March, bringing their holdings to $204 million. April saw another surge, with total memecoin holdings reaching $297 million. Most institutions then followed the trend of liquidating their holdings for profits as memecoin markets underwent corrections.
If anything, it illustrates the risk-taking behavior that institutions are now normalizing with this specific volatile crypto segment. Regardless, they stuck to the largest meme-based asset, DOGE, which they interacted with abundantly thanks to its liquidity and relative stability.
PEPE, of course, was another asset they were interested in while tapping into the memecoin market. According to data collected on May 1, 2024, institutional investors held 22.23% of their memecoin holdings in PEPE. DOGE was higher at 36.17% and SHIB at 10.39%. Surprisingly, institutions have taken a liking to BONK and its growing popularity, making it their fourth largest holding, with a total of $74.5 million allocated to the asset.
While major assets have seen significant holdings, institutional users are refraining from jumping into new memecoins. This symbolizes their limits in terms of risk-taking. Retail customers on Bybit have, however, shown considerable interest in holding the newly launched tokens long-term.
As part of their enhanced crypto strategies, institutions prefer to invest massive sums in top memecoins and liquidate their holdings when markets slow down. On the other hand, retail investors prefer to allocate small amounts to new tokens and hold them until they offer massive returns – eventually.