Markets
Demand for meme coins is stronger than ever with fast money chasing Pepe and WIF: crypto analyst
The meme coin season continues to advance, undeterred by the stagnation of the bitcoin rally (BTC).
Data tracking site CoinMarketCap listed a record 138 meme coins in April, extending the parabolic rise since the April 2023 count of just 18, according to pseudonymous Crypto analyst Coryo. The number could be much higher as CoinMarketCap only lists 10% of all tokens, Crypto Coryo said on X.
To date, 2,229 meme coins were listed on CoinMarketCapboasting a combined market capitalization of over $50 billion, almost matching the market value of investment banking giant JPMorgan (JPM) and US electric car maker Tesla (TSLA).
This is an impressive feat, as meme coins are often criticized for lacking utility or real use case and considered a substitute for pure speculation.
“In principle, people participate in meme coins because (i) the value can go up, (ii) they feel democratic and open for anyone to participate, and (iii) they are fun,” Vitalik Buterin, founder of leading contracts blockchain smart Ethereum, which is also home to several popular meme coins, said in a blog post.
Arthur Hayes, co-founder and former CEO of cryptocurrency exchange BitMEX and chief investment officer at Maelstrom, argues for a deeper understanding of meme coins as drivers of blockchain ecosystem growth.
“You may consider these things stupid and worthless, but if it attracts attention and more engineers to space, it will be a positive value for the chain itself,” Hayes said in an interview with Real Vision on March 30.
The programmable blockchain Solana, being cheaper and faster than its rival Ethereum, has become the new home for these tokens since late last year. At one point in the first quarter, the meme frenzy led to record network activity on Solana, pushing the price of SOL above $200 for the first time since November 2021.
“Due to high gas fees, degen activity has moved (partially) away from Ethereum. We saw this with Bonk on Solana and Bald on Base. But Solana is now the home of meme coins,” noted Crypto Coryo.
Bitcoin’s recent severe price action has speculators chasing popular meme token pepe (PEPE). The token is up nearly 17% in seven days, becoming the ninth best-performing cryptocurrency on CoinMarketCap’s list.
Additionally, it has the second-highest ratio of perpetual futures open interest (OI) to market capitalization, according to data tracked by Paris-based Kaiko. Dogifwhat (WIF), also a meme coin, has the highest OI/market cap ratio.
“Pepe (PEPE) and Dogwifhat (WIF) have double the ratio relative to other altcoins. A higher ratio indicates that the derivatives market positioning for an asset is large compared to its market value, making the discovery of prices for these tokens are most concentrated in perpetual futures markets,” Kaiko said in the weekly newsletter.
Notional open interest refers to the dollar value locked in the number of active or open futures contracts.