Memecoins
Meme coins could be here to stay with institutional investors taking positions
Meme cryptocurrencies are fueling crypto investment in 2024, attracting institutional and retail investors. Several meme cryptocurrencies have moved beyond emerging trend status to enter more mainstream environments. Meme cryptocurrencies like BONK, PEPE, and Dogwifhat (WIF) are growing rapidly, with market caps now exceeding $1 billion.
VanEck, a $90 billion asset management firm, created a meme coin index that has risen 280% over the past year. Additionally, data provided by the cryptocurrency exchange Binance shows that the value of meme coins has increased by 580% since the beginning of the year, fueled by a 53% increase in social media mentions since January. That’s 20% more mentions than AI coins on social media.
Attracting institutional investors
Institutional investors have taken significant positions. One cryptocurrency exchange reports a surge from $63 million in early 2024 to over $300 million in April. Dogecoin and Shiba Inu, with the largest market caps, have been favored for liquidity. The most popular new coin, BONKalso attracts significant funding – up to $75 million from institutional investors this year, according to Yahoo Finance.
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Despite their notorious ups and downs, institutional investors have increased their holdings by more than 200% this year. That figure is likely slightly lower today, as some investors watched the price rise and took profits. Still, institutional and retail investors alike continue to be fascinated by memes.
What makes Meme Coins different from traditional cryptocurrencies?
The appeal of meme currencies is different from that of traditional cryptocurrencies. While cryptocurrencies like Bitcoin and Ethereum have practical uses in finance and technology, such as decentralized currencies and smart contracts, meme currencies lack concrete use cases.
Inspired by internet memes, meme coins attract enthusiastic followers who play a significant role in promoting the coins. The more popular they become, the more valuable they become. Attracting the attention of influencers, especially in the business sector, can be a major value generator.
However, meme currencies are also subject to high volatility. Prices can skyrocket one day thanks to viral online content or a celebrity mention, and plummet just as quickly the next.
While most traditional cryptocurrencies have a cap, leading to scarcity, most meme coins do not. As a result, this can impact value over time. Several meme coins have taken to “burning” tokens, helping to prevent such devaluation.
Investing in Meme Coins
Investing in memes is highly speculative. Investors should conduct due diligence and make informed decisions before making any investment.
The publisher does not represent or warrant that the information contained in this content is accurate or complete, as this article was provided by an external contributor. This content is intended for informational purposes and should not be construed as investment advice. As with all investments, there is risk and past performance of a particular asset class is no guarantee of future performance. Your situation is unique and the products and services described herein may or may not be suitable for your particular circumstances. This is not an offer of financial advice or financial services. Performance information is subject to change. The views, thoughts and opinions contained in this contributor content are solely those of the content provider.
Lee Enterprises newsroom and editorial staff were not involved in the creation of this content.
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