Memecoins
Dogecoin and meme token volumes remain resilient
The meme coin frenzy may have calmed down a bit as bitcoin has lost some upward momentum. However, the major meme token markets are even more liquid than earlier this year, indicating that these seemingly unserious cryptocurrencies, often criticized for lacking utility, are here to stay.
According to Kaiko Research, meme tokens have been resilient during the recent market correction, continuing to perform strongly despite historically underperforming during downturns. Year-to-date (YTD) returns for these tokens range from 80% to 1800%, with trading volumes remaining strong.
Kaiko Research reports that weekly trading volume for meme tokens has increased more than 200% year to date, reaching approximately $11 billion. This can be attributed to the accessibility of the tokens and their ability to adapt to market trends, which has attracted interest from the community.
“Meme tokens have shown unexpected resilience in the face of market corrections, maintaining strong trading volumes and performance,” said an analyst at Kaiko Research. “Their popularity is largely driven by their accessibility and the strong community interest they generate.”
However, meme coins tend to have higher leverage than most altcoins and are therefore more influenced by speculative bias.
Interestingly, the correlation between meme tokens and other retail-oriented speculative assets, such as meme stocks, has been relatively weak and highly volatile. For example, the 60-day rolling correlation between the largest meme token, (DOGE), and video game retailer GameStop (NYSE:) has mostly remained below 0.3 over the past year.
Over the past week, meme stocks have received an unexpected boost, with GME and AMC Entertainment (NYSE:) seeing increases on May 13 and 14. This caused the correlation between DOGE and GME to reach its highest level in over a year.
“Meme stocks saw a notable increase last week, which also affected the correlation between Dogecoin and GameStop,” Kaiko Research added. “This spike in correlation highlights the interconnected nature of retail-driven speculative assets.”