Memecoins
It’s not just Degens, institutions love Memecoins too
In a relationship released by Bybit on June 4, memecoins have become highly valued assets for institutions on its platform, reflecting the same elsewhere. Beyond the attractive features that retail users get, meme coins represent the ability to multiply wealth quickly, especially during bull runs. The institutions are all in favor.
According to the report, institutional interactions with memecoins through spot holdings increased by 226% in March, bringing their holdings to a whopping $204 million. April saw a further increase as total memecoin holdings rose to $297 million. Most institutions then followed the trend of liquidating their holdings for profit as memecoin markets underwent corrections.
If anything, this describes the risk-taking behavior that institutions are now normalizing with this specific volatile crypto segment. Regardless, they have remained loyal to the largest meme-based asset, DOGE, which they have interacted with abundantly due to its liquidity and relative stability.
PEPE, of course, was another asset they were interested in as they exploited the memecoin market. According to data collected on May 1, 2024, institutional investors held 22.23% of their memecoin holdings in PEPE. DOGE was higher at 36.17% and SHIB at 10.39%. Surprisingly, institutions have taken a liking to BONK and its massive growth in popularity, making it their fourth largest holding, with a total of $74.5 million allocated to the asset.
While major assets have seen large holdings, institutional users are refraining from delving into new memecoins. This symbolizes their boundaries with risk taking. Retail customers on Bybit, however, have shown huge interest in holding the newly launched tokens for the long term.
Institutions prefer to invest large sums in top memecoins and liquidate their holdings when markets slow down as part of their enhanced crypto strategies. On the other hand, retail investors prefer to allocate small sums to new tokens and hold onto them until they deliver massive returns – possibly.