The meteoric rise of memecoins, these atypical cryptos marked by high volatility, attracts not only individual investors but also institutions. The appeal of memecoins like Dogecoin and Shiba Inu seems irresistible, despite the rollercoaster ride in their value. Fueled by social networks and community buzz, these cryptos are seeing an influx of new investors. A report from Bybit confirms this trend, highlighting a dramatic increase in memecoin holdings.
Institutions embrace crypto meme
Memecoins continue to invade the crypto market, it seems. A new report from the Bybit cryptocurrency exchange, titled “ Beyond the Hype: The Realities of Institutional Memecoin Investments “, revealed an unprecedented enthusiasm among institutions for memecoins.
Between February and March, institutional holdings of memecoins jumped 226%, reaching $204 million. In April, this figure jumped to $293.7 million, before falling back to $139 million at the end of the period studied, indicating an aggressive selling strategy in the face of market volatility.
“ Institutional investors were ready to jump on the memecoin bandwagon as the trend reached its peak in late March », underlines the report.
This opportunistic strategy reflects calculated risk-taking, aimed at capitalize on the popularity peaks of these atypical cryptos. Even after reducing their positions, institutions maintain a significant allocation of memecoins, reflecting their expectation of a return to favorable market conditions.
The appeal of cryptos even for institutions lies not only in their high return potential but also in their ability to diversify portfolios beyond traditional assets and even conventional cryptocurrencies.
Dogecoin (DOGE) remains the darling of institutionsrepresenting 36.17% of their memecoin holdings, followed by PEPE and SHIB, which continue to attract attention despite their speculative nature.
Individuals are not left out
On the side of individual investors, the appetite for meme cryptos is no less impressive. According to Bybit, individual holdings of same coins exploded by 478% between February and April.
However, like their institutional counterparts, they also sold off heavily when the market began to deteriorate, falling from $567 million to $371 million.
Individuals show a notable preference for Ethereum-based memecoins, with 20.95% of their assets in PEPE and 14.61% in SHIB. These altcoins, while often mocked for their lack of solid foundations, enjoy massive support from online communities, fueling dramatic price increases.
The strategies of individuals, however, seem more diversified than those of institutions, with an average allocation of 4% of their portfolios to memecoinscompared to 2.5% for institutions.
“ DOGE has certainly found its way into the long-term HODL stacks of both cohorts, reflecting its iconic status and strong performance over time », observes the report.
Additionally, BONK, another lesser-known memecoin, has captured the attention of investors, particularly institutions that allocate a notable 10% of their memecoin holdings to it.
The rise of crypto meme perfectly illustrates the unpredictable and fascinating nature of the cryptocurrency market. Whether retail or institutional, investors appear ready to bet on these colorful altcoins, hoping to ride the wave of popular trends to make significant gains.
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