The trend of institutional investment growth in meme coins has been notable this year, with a recent report from Bybit, a notable cryptocurrency exchange, shedding light on the remarkable surge. Meme coins, which began the year with a valuation of $63 million in institutional investments, saw a staggering rise to approximately $300 million by April, signifying a significant increase of nearly 4.5 times. This upsurge portrays a heightened interest from professional investors towards meme coins.
Noteworthy Meme Coins Garnering Investments
Institutional investments particularly gravitated towards Dogecoin (DOGE) and Shiba Inu (SHIB), benefiting from their substantial liquidity in the spot market. The appeal of these coins to institutional investors was their capacity for substantial trading volumes without causing notable market price fluctuations.
Bybit's data, tracking its own exchange figures, did not encompass meme coin assets from other platforms. Among the fresher meme coins in the market, BONK emerged as a popular choice, attracting over $75 million in institutional investments and solidifying its position as one of the favored new meme coins of the year.
Understanding the Dip in Investments during May
May witnessed a marked decline in institutional holdings in meme coins, dropping to $125 million due to profit-taking activities. Despite this reduction, the initial growth spurt in the early months highlighted unwavering and substantial interest in meme coins.
Key Points for Potential Investors
Insights for Investors:
- Dogecoin and Shiba Inu remain top picks for their liquidity.
- Up-and-coming meme coins like BONK are attracting attention.
- Profit-taking operations influenced the May decline.
- Institutional backing in stablecoins saw a decline, while investments in Bitcoin and Ethereum surged.
- Institutional investors favor Dogecoin marginally over individual investors.
As of May 1, Dogecoin held the premier position in meme coin investments among both individual and institutional investors, with institutional investors assigning 36% of their meme coin investments to DOGE compared to individual investors' 24.5%. The institutional affinity towards DOGE is likely due to its greater liquidity and perceived stability. Both investor groups engaged in Ethereum-based meme coins like PEPE and SHIB, albeit with varied distribution strategies.
