Analyst: The meme coin wave is stronger than ever

Author: Omkar Godbole Source: coindesk Translation: Shan Ouba, Golden Finance

Despite the stagnation of Bitcoin’s (BTC) rally, the meme wave remains unstoppable.

According to anonymous analyst Crypto Coryo, the number of memes listed on data tracking website CoinMarketCap hit a record high of 138 in April this year, showing a parabolic growth from just 18 in April last year. Crypto Coryo said on the X platform that the actual number may be higher, as CoinMarketCap reportedly lists only 10% of all tokens.

As of press time, the number of memes listed on CoinMarketCap has reached 2,229, with a total market value of more than $50 billion, almost comparable to the market value of investment banking giant JPMorgan Chase (JPM) and US electric car manufacturer Tesla (TSLA).

It’s an impressive achievement, as memes are often criticized for lacking utility or real use cases and being purely speculative.

“Fundamentally, people trade in memes because (i) they’re likely to go up in value, (ii) they seem democratic and open for anyone to participate, and (iii) they’re fun,” Vitalik Buterin, the founder of Ethereum, the birthplace of some of today’s hottest memes, wrote in a blog post.

Arthur Hayes, co-founder and former CEO of cryptocurrency exchange BitMEX and chief investment officer at Maelstrom, is more inclined to see memes as a driver of growth in the blockchain ecosystem and advocates for a deeper understanding of them.

“You can denigrate these things as stupid and worthless, but if they can attract more attention and engineers into the space, then they are a positive value for the blockchain itself,” Hayes said in an interview with Real Vision on March 30.

Solana, a programmable blockchain that is cheaper and faster than Ethereum, has become the new home for these tokens since the end of last year. During the first quarter, the meme craze led to a record high in Solana network activity, pushing the price of SOL above $200 for the first time since November 2021.

“DeFi activity has (partially) moved away from Ethereum due to high gas fees. We saw this with Bonk on Solana and Bald on Base. But now Solana has become the home of the meme,” Crypto Coryo noted.

BUCKS CHASE PEPE

Bitcoin’s recent lackluster price action has seen speculators chase the popular meme token pepe (PEPE). The token is up nearly 17% in seven days, becoming the ninth-best performing cryptocurrency on CoinMarketCap’s list.

In addition, PEPE also has the second-highest perpetual swaps open interest (OI) to market cap ratio behind another meme, Dogifwhat (WIF), according to data tracked by Paris-based Kaiko.

Kaiko said in its weekly report: "Pepe (PEPE) and Dogwifhat (WIF) have a ratio twice that of other altcoins. The higher ratios indicate that the derivatives market positioning of assets is larger compared to market capitalization, which makes the price discovery of these tokens more concentrated in the perpetual swap contract market."

Total open interest refers to the US dollar value locked in the number of active or open futures contracts.