Meme coins ranked among the most popular crypto narratives of 2024, creating a divide between crypto tokens. Bitcoin stands out among top crypto tokens with 125% year-to-date gains, and the meme coin category, or the “other tokens”, hit a key milestone, crossing a market capitalization of $100 billion.
Dogecoin (DOGE), Shiba Inu (SHIB) and Pepe (PEPE), the top three meme coins, have erased between 11% and 13% of their value in the past week. Bitcoin consolidates close to $95,000, nearly 12% below its all-time high of $108,353.
Bitcoin vs meme coins, most popular narrative of 2024
Meme coins captured the attention of most crypto traders and emerged as a popular narrative this year. A CoinGecko report updated on Monday notes that the meme coin narrative captured a combined 30.67% of global investor interest.
The report highlights that almost a third of crypto narrative interest this year was focused on speculative gains from meme coins. Traders placed a lower emphasis on fundamentals and turned their attention and capital towards dog and cat-related meme coins, pop culture references and internet personality-themed meme tokens.
Meme coins have enjoyed a 6% year-on-year increase in interest from crypto market participants. While Bitcoin garnered institutional attention and capital allocation following the approval of Spot BTC ETFs in the US, four meme coin-based trends ranked among the top 20 narratives in crypto.
Solana (SOL), Base, Artificial intelligence and cat-themed meme coins garnered between 14% and 8% of interest among crypto narratives.
With meme coins cementing their place as a trending token category and trending this cycle, catalysts like institutional allocation and ETF approval could pave the way for further gains for holders.
Base, Solana, XRP memes dominate over blue-chip memes in speculative gains
In the first week of December, XRP-based meme coins yielded gains for holders amidst rising relevance and demand for the XRP Ledger and its native token XRP. Similarly, Solana and Base-based meme coins have secured a rank in the top 20 cryptocurrency narratives of the year, dominating the popularity of blue-chip meme coins.
Dogecoin, SHIB and PEPE are typically considered blue-chip memes, with a market capitalization between $7 and $46 billion, as seen on CoinGecko. The top 3 tokens in the meme coin category observed a spike in active addresses and activity from traders within the first two weeks of December.
In the last seven days, the top 3 tokens have erased double-digit value, according to CoinGecko data. Several other meme tokens have accumulated double-digit losses, barring Pudgy Penguins (PENGU).
Institutional meme coin holdings tripled this year
The wave of meme coin adoption drove institutions to tripe their holdings in the category. From February to March 2024, institutional investors’ spot holdings of memecoins climbed from $62.5 million to $204.8 million.
This marks a 226% surge, a significant spike in interest in the memecoin market, according to Bybit’s report on institutional investment in meme coins.
In the Bybit report, Eugene Cheung, Head of Institutions of Bybit, is quoted as saying:
“Our report ‘Beyond the Hype’ shows that institutional and retail investors are actively leveraging the opportunities presented by the memecoin market. The strategic agility of institutions and the dynamic management by retail investors reflect a sophisticated engagement with these assets. We invite everyone to delve into the full report to understand these important dynamics better.”
Dogecoin ETF likely in 2025?
Rising institutional adoption has raised questions about the likelihood of approval from the U.S. financial regulator, the Securities and Exchange Commission, for meme coin ETFs. Nate Geraci, President of ETFStore expressed shock that an issuer has yet to file for a Dogecoin ETF, both in and outside of the U.S.
Geraci believes the only possible downside of such a filing would be that it would mark a futile attempt and end up as a marketing expense for an issuer. The President of the ETFStore commented on the “DOGE” ticker since it is the ticker for the largest meme coin and would likely hold the highest relevance and demand among issuers in the future,
As the SEC greenlights the Bitcoin-Ethereum hybrid ETF, DOGE traders have hopes for a Dogecoin ETF approval in 2025.
Bitcoin and meme coin divide runs deep
Ruslan Lienkha, Chief of markets at YouHodler told Crypto.news in an exclusive interview:
“Dogecoin’s recent performance appears primarily speculative, driven by its association with Elon Musk, rather than any underlying fundamentals, as it still lacks substantial real-world use cases. However, a potential utility could develop in the future.”
Lienkha comments on what divides Dogecoin and similar meme coins from Bitcoin. While Bitcoin has gained acceptance as “digital gold” and hedge against the devaluation of a fiat currency, Dogecoin and the like are considered speculative tokens.
The Bitcoin and meme coin divide runs deep and could influence the approval of a meme coin ETF, further investment from institutional investors and retail participation in the category in the second leg of the bull market.
Typically, a drawdown in Bitcoin ushers a steeper and market-wide correction, wiping recent gains from meme coins and hitting the market capitalization of the category negatively. The correlation with Bitcoin could continue to drag down meme coins, and in every instance, the largest crypto crashes or reacts to a market-moving event during this cycle.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
