Key Points
- Meme coins have emerged as a significant narrative in the crypto world in 2024, causing a division among crypto tokens.
- The meme coin category reached a market capitalization milestone of $100 billion, while Bitcoin recorded 125% year-to-date gains.
Meme coins have become a notable narrative in the crypto sphere in 2024, causing a split among different types of crypto tokens.
Bitcoin remains a prominent player among top crypto tokens, boasting 125% gains year-to-date, and the meme coin category, also known as “other tokens,” achieved a significant milestone by crossing a market capitalization of $100 billion.
The Popularity of Meme Coins in 2024
Meme coins have attracted the majority of crypto traders and emerged as a significant narrative this year.
According to a CoinGecko report updated on Monday, meme coins accounted for 30.67% of global investor interest.
Almost a third of crypto narrative interest this year was focused on speculative gains from meme coins, with traders placing less emphasis on fundamentals and more on dog and cat-themed meme coins, pop culture references, and internet personality-themed meme tokens.
Meme coins experienced a 6% year-on-year increase in interest from crypto market participants.
While Bitcoin attracted 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.
Speculative Gains and Institutional Adoption
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.
The adoption of meme coins spurred institutions to triple their holdings in the category.
From February to March 2024, institutional investors’ spot holdings of meme coins climbed from $62.5 million to $204.8 million, marking a 226% surge, according to a report by Bybit.
Potential for a Dogecoin ETF
The increase in institutional adoption has sparked questions about the potential approval of meme coin ETFs by the U.S. financial regulator, the Securities and Exchange Commission.
Nate Geraci, President of ETFStore, expressed surprise that no issuer has yet filed for a Dogecoin ETF, both in and outside of the U.S.
As the SEC greenlights the Bitcoin-Ethereum hybrid ETF, DOGE traders have hopes for a Dogecoin ETF approval in 2025.
The Divide Between Bitcoin and Meme Coins
Ruslan Lienkha, Chief of markets at YouHodler, commented on the divide between Dogecoin and similar meme coins and Bitcoin.
While Bitcoin has gained acceptance as “digital gold” and a hedge against the devaluation of a fiat currency, Dogecoin and similar tokens are considered speculative.
The Bitcoin and meme coin divide 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 leads to a steeper and market-wide correction, wiping recent gains from meme coins and negatively impacting the market capitalization of the category.
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.
