06 Jun, 2024

Memecoin Mania Hits New Highs as Institutions and Celebrities Pile In

Susan Oh
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Susan Oh
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Susan Oh is a leading figure in the integration of AI and blockchain for social good, serving as the CMO for BeOmni by Beyond Imagination and a civic technologist dedicated to creating scalable solutions. She is a board member of the Blockchain Commission For Sustainable Development supported by the UN GA Office of Partnerships, and...
Michael Gord
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Michael, co-founder, and CEO of Global Digital Assets (GDA) Group, is a distinguished figure in the blockchain and Metaverse industries, with a focus on capital markets. As the former Managing Director of the XDB Foundation and CEO of MLG Blockchain, he has been involved in over $25 billion of digital asset financings. A pioneer in...
memecoin mania
Key Takeaways
  • Interest in memecoins marks a new high point as institutional investors significantly increase their holdings.
  • The recent rise in memecoin popularity is partly driven by a number of new celebrity-endorsed memecoin launches.

Bybit, the third-largest crypto exchange by volume, recently released a report about memecoin trading activity on its platform. 

The report detailed how institutional investors have substantially increased their trading activity in this notoriously volatile sector.

From February to March, institutional investment in memecoins surged by 226% to $204 million. 

This number then peaked in April at $293.7 million. However, it rapidly decreased to $139 million in an aggressive round of profit-taking.

This report demonstrates how institutional investors have embraced the extreme volatility of memecoins with targeted trading strategies.

The most popular memecoins for these high-risk institutional strategies were Dogecoin (DOGE) and Shiba Inu (SHIB), due to their significant market liquidity.

Dogecoin
Dogecoin | Source: Freepik

Retail investor interest in memecoins was even greater, with an explosive 478% increase in holdings between February and April.

A recent round of celebrity-endorsed memecoin launches has added to the recent interest and controversy.

Ethereum co-founder Vitalik Buterin recently clashed with celebrities over the role of memecoins in the larger crypto industry.

Ethereum’s Buterin Clashes With Memecoin Celebrities

At the heart of the controversy over memecoins is their general role in the larger crypto industry.

For many people, memecoins are merely a fun vehicle for speculation.

Others see memecoins as a valuable source of community and a platform for making positive change in the world. 

The specific issue for this particular memecoin controversy was the $MOTHER token launched by famous rapper Iggy Azalea.

Buterin argued that these short-lived, celebrity-backed memecoins only harm the crypto industry by encouraging an image of fraud and insider trading.

By contrast, he pointed out that Ashton Kutcher’s and Mila Kunis’s Stoner Cats token had an actual purpose that was funded by the launch of the memecoin.

“The north star should be: to have a project where, even if eventually all tokens involved go to zero, the average person who participated is happy to have done so.”

– Vitalik Buterin, Ethereum Co-Founder, stated.

DOGE Remains the Original Memecoin King

This controversy over the role of memecoins in the larger crypto industry is perfectly captured by the original and most prominent memecoin, Dogecoin. 

The name was chosen to be as ridiculous as possible, as a play on Bitcoin’s growing seriousness.

However, what began as a joke soon expanded into a real community and platform for charitable efforts.

The best example of this positive and negative memecoin divide started in 2014. Then, the Dogecoin community raised $30,000 for the Jamaican bobsleigh team to attend the Winter Olympics. 

The story was picked up by the popular media, and interest in Dogecoin rose dramatically.

This effect peaked when Elon Musk began to pump the coin, playfully joining in with common memes.

Dogecoin then fell to one-tenth of its peak value once the excitement wore off.

2024 DOGE Price Chart
2024 DOGE Price Chart | Source: Tradingview

Some people argue that the rise and fall of the price was simply part of the fun of a community-driven financial platform.

Others argue that real harm is done to those who get swept up in the craze and end up on the wrong side of the volatile price swings. 

Either way, it is clear that memecoins continue to grow alongside the larger crypto industry.

Moreover, memecoins continue to capture that sense of excitement and community that early crypto offered.

This is in direct contrast to the growing seriousness and institutionalization of the dominant blockchains as they compete with traditional finance for trillions of dollars in assets.