Memecoins
Meme Coin Demand Is Stronger Than Ever With Fast Money Chasing Pepe and WIF: Crypto Analyst
The meme coin season continues to advance, undeterred by Bitcoin’s stalled rally. (BTC).
Data tracking website CoinMarketCap listed a record 138 meme coins in April, extending the parabolic rise from the total of just 18 in April 2023, according to pseudonymous Crypto analyst Coryo. The number could be much higher, as CoinMarketCap would only list 10% of all tokens, Crypto Coryo said on.
At press time, 2,229 pieces even were listed on CoinMarketCapboasting a combined market capitalization of over $50 billion, almost matching the market value of investment banking giant JPMorgan (JPM) and American electric car maker Tesla (TSLA).
This is an impressive feat, as meme coins are often criticized for their lack of utility or real-world use cases and are seen as a proxy for pure speculation.
“In principle, people participate in meme corners because (i) the value can increase, (ii) they feel democratic and open to everyone’s participation, and (iii) they are fun,” Vitalik Buterin, founder of the leading smart contract blockchain. Ethereum, which is also home to several popular coins, said in a blog post.
Arthur Hayes, co-founder and former CEO of crypto exchange BitMEX and chief investment officer at Maelstrom, promotes a deeper understanding of meme coins as a driver of blockchain ecosystem growth.
“You can look at these things as stupid and worthless, but if it brings attention and more engineers to the space, that’s positive value for the channel itself,” Hayes said in an interview with Real Vision on March 30.
The programmable Solana blockchain, cheaper and faster than its rival Ethereum, has become the new home for these tokens since late last year. At one point during the first quarter, the meme frenzy led to record network activity on Solana, pushing SOL’s price above $200 for the first time since November 2021.
“Due to high gas fees, degen activity has (partially) moved away from Ethereum. We saw it with Bonk on Solana and Bald on Base. But Solana is now the home of meme coins,” a noted Crypto Coryo.
Bitcoin’s recent dour price action has speculators chasing a popular meme token pepe (PEPE). The token rose almost 17% in seven days, becoming the ninth best-performing cryptocurrency on CoinMarketCap’s list.
Additionally, according to data tracked by Paris-based Kaiko, it has the second-highest perpetual term open interest (OI) ratio to market cap. Dogifwhat (WIF), also a coin, has the highest OI to market cap ratio.
“Pepe (PEPE) and Dogwifhat (WIF) have twice the ratio of other altcoins. A higher ratio indicates that an asset’s derivative market positioning is large relative to its market capitalization, making “The price discovery of these tokens is more concentrated in the perpetual futures markets,” Kaiko said in the weekly bulletin.
Notional open interest refers to the dollar value locked in the number of active or open futures contracts.