Why meme coins are fading this cycle: A tale of Bitcoin and the others

Meme Coins Emerge as a Major Crypto Narrative in 2024

Meme coins, a type of cryptocurrency often associated with humor or internet culture, have surged in popularity this year, capturing the attention of crypto traders and emerging as a prominent narrative in the industry.

Bitcoin vs Meme Coins: Market Dominance

Bitcoin, the leading cryptocurrency, has seen substantial growth, with year-to-date gains of 125%. Meme coins, collectively referred to as "other tokens," have also witnessed significant growth, reaching a combined market capitalization of over $100 billion.

Top Meme Coins and Performance

Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE), the three most popular meme coins, have lost 11-13% of their value over the past week. Bitcoin, meanwhile, has consolidated around $95,000, a decrease of about 12% from its all-time high.

Meme Coin Trends and Investor Interest

According to a recent CoinGecko report, meme coins accounted for approximately 30.67% of global investor interest this year. Traders have shifted their focus from fundamentals to speculative gains, investing heavily in meme coins with references to animals, pop culture, and internet personalities.

Institutional Adoption of Meme Coins

Institutional investors have also shown increased interest in meme coins, with their holdings tripling between February and March 2024. This shift reflects the growing acceptance and potential value of these assets within the crypto market.

Dogecoin ETF Prospects

The possibility of a Dogecoin ETF has been raised, with experts speculating that approval from the SEC could occur in 2025. The "DOGE" ticker is seen as a valuable asset for issuers seeking to tap into the growing popularity of meme coins.

Bitcoin and Meme Coin Divide

Despite the rise of meme coins, Bitcoin maintains its status as a reliable store of value and a hedge against inflation. This divide between Bitcoin and meme coins could influence the approval of meme coin ETFs and their long-term investment potential.

Correlation with Bitcoin

Meme coins have shown a strong correlation with Bitcoin, which means that a decline in Bitcoin's value could have a negative impact on the meme coin market, particularly due to their speculative nature.