Record! Meme Coins Are Taking Over the Blockchain World
Unaffected by Bitcoin's (BTC) stalled rise, the meme coin season continues to roll forward. According to analyst pseudonymous Crypto Coryo, data tracking website CoinMarketCap listed a record number of 138 meme coins in April, extending the parabolic rise from just 18 in April 2023. The number could be much higher, Crypto Coryo said, as CoinMarketCap reportedly lists only 10% of all tokens.
This is an impressive feat, as meme coins are often criticized for lacking utility or real use cases and are seen as a representation of pure speculation.
“In principle, people participate in meme coins for the following reasons: they can increase in value, they are democratic and open to public participation, and they are fun,” Vitalik Buterin, founder of leading smart contract blockchain Ethereum, which is also home to some popular meme coins, wrote in a blog post,
Arthur Hayes, co-founder and former CEO of cryptocurrency exchange BitMEX and investment advisor to Maelstrom, advocates for a deeper understanding of meme coins as a driver of blockchain ecosystem growth.
“You can dismiss these as stupid and worthless things, but if it draws attention to the field and brings in more engineers, it’s a positive asset for the chain itself,” Hayes said in a March 30 interview with Real Vision.
Programmable blockchain Solana has become the new home for these tokens since late last year as it is cheaper and faster than its rival Ethereum. In the first quarter, the meme frenzy led to record network activity on Solana, pushing the price of SOL above $200 for the first time since November 2021.
“Due to high gas fees, degen activity has partially moved away from Ethereum. We saw this with Bonk on Solana and Kel on Base. But now Solana is a hotbed of meme coins,” noted Crypto Coryo.
Bitcoin’s recent stagnant price action has investors chasing the popular meme token pepe (PEPE). The token rose almost 17% in seven days, making it the ninth best-performing cryptocurrency on CoinMarketCap’s list.
It also has the second-highest open interest (OI) to market value ratio of perpetual futures securities, according to data tracked by Paris-based Kaiko. Another meme coin, Dogifwhat (WIF), has the highest OI-to-market cap ratio.
“Pepe (PEPE) and Dogwifhat (WIF) exhibit rates twice that of other altcoins,” Kaiko said in its weekly newsletter. “A higher rate indicates that positioning the derivatives market for an asset is large relative to market capitalization, price discovery for these tokens with constant futures.” “It shows that it causes more concentration in the markets.” said.
The notional value of an open position refers to the dollar value blocked based on the number of active or open futures contracts.
