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Memecoins Surge in Popularity Among Crypto Investors in 2024

Explore the growing trend of memecoins in 2024 as Solana and Base drive investor interest, highlighting shifts in crypto portfolios and trading behaviors.
Published on 2024-06-05

Memecoins Capture Investor Interest

In 2024, memecoins have emerged as a focal point for crypto investors, driven by low transaction costs on platforms like Solana and Base. Despite a market phase termed “chopsolidation,” tokens such as DogWifHat and Pepe have yielded significant returns. Although currently below their Q1 peaks, a bullish resurgence is anticipated.

Investor Engagement Trends

Between January and May 2024, Bybit analyzed both retail and institutional engagement with memecoins. A significant portion of crypto portfolios is now dedicated to these digital tokens, showcasing strategic market shifts. Active users, defined as those executing over 20 trades monthly, participated in trading 25 memecoins like BABYDOGE, BOB, and PEPE.

Institutional Trading Dynamics

The approval of the Bitcoin ETF in January triggered a surge in institutional memecoin investments, peaking in March and April. Holdings soared to $293.7 million, reflecting a 125% rise from January. However, as market sentiment shifted, these holdings decreased to $139 million. Concurrently, stablecoin holdings reduced, with funds reallocating to memecoins, Bitcoin, and Ether.

Retail Investor Behavior

Retail investors mirrored institutional trends, expanding their memecoin, Bitcoin, and Ether portfolios in anticipation of a bull run. Their stablecoin reserves also grew, reaching $2.9 billion by May. Retail memecoin holdings peaked at $567 million in April, before declining, demonstrating responsiveness to market dynamics.

Trading Volume Insights

Retail traders showed limited interest in memecoin perpetual contracts, with trading volumes significantly lower than BTC, Ether, and altcoins. Their memecoin trading volume accounted for just 5.8% of the total $1.2 trillion. Conversely, institutions, while conservative in spot holdings, exhibited risk-taking in perpetual trading, with memecoins representing 15% of their $2.6 trillion total volume.

Bybit's report underscores the evolving landscape of crypto investments, highlighting the growing allure of memecoins and the strategic shifts among investors in 2024.

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