Meme Coins Are Fueling Crypto Investments in 2024, Attracting Institutional and Retail Investors Alike

Several meme coins have moved beyond the emerging trend status into more mainstream environments. Meme coins like BONK, PEPE, and Dogwifhat (WIF) are growing rapidly

Meme coins, a once-niche category of cryptocurrencies, are now attracting institutional and retail investors in droves. Several meme coins have moved beyond emerging trend status into more mainstream environments.

Several meme coins, such as BONK, PEPE, and Dogwifhat (WIF), are experiencing rapid growth, with market caps now surpassing $1 billion.

According to an index created by VanEck, a $90 billion asset management firm, meme coins have surged 280% in the past year.

Moreover, data from the crypto exchange Binance shows that meme coins have increased in value by 580% year-to-date, fueled by a 53% increase in social media mentions since January. This is 20% more than AI coins across social media channels.

Institutions Take Positions in Meme Coins

Several institutional investors have taken significant positions in meme coins. According to one crypto exchange, institutional investment in meme coins has increased from $63 million at the beginning of 2024 to over $300 million in April.

Among the meme coins, Dogecoin and Shiba Inu, with the largest market capitalizations, were favored for liquidity.

However, the most popular new coin, BONK, is also attracting substantial funds — as much as $75 million from institutional investors this year, according to Yahoo Finance.

Despite the notorious highs and lows of meme coins, institutional investors have increased their holdings by more than 200% this year.

While the number may have decreased as some investors sold for a profit, both institutional and retail investors continue to be fascinated by meme coins.

What Distinguishes Meme Coins from Traditional Cryptocurrency?

The attraction to meme coins differs from that of traditional cryptocurrencies.

While crypto like Bitcoin and Ethereum have practical uses in finance and technology such as decentralized currencies and smart contracts, meme coins lack substantive real-world use cases.

Loyal Communities and High Volatility

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 are. Getting the attention of influencers, especially in the business sector, can be a significant value driver.

However, meme coins are also prone to high volatility. Prices can skyrocket one day thanks to viral content online or mention by a celebrity endorsement, and tumble just as quickly the next.

Lack of Scarcity, But Burning Tokens

While most traditional cryptocurrencies have a cap, producing scarcity, most meme coins do not. As a result, this can impact value over time.

However, several meme coins have taken to “burning” tokens, which helps prevent such a devaluation.

Investing in Meme Coins

It's important to note that investing in meme coins is highly speculative. Before making any investments, investors should do their due diligence and make informed decisions.

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