Even if not everyone is a fan, meme coins are definitely attracting a lot of attention from crypto observers. But data shows they are also increasingly swallowing up the crypto economy.
The sector, powered by the likes of Dogecoin (DOGE) and Shiba Inu (SHIB), accounted for 3.16% of the total market capitalization of all cryptocurrencies as of December 1, up from 1.3% at the beginning of the year. New report from cryptocurrency exchange CEX.IO. Excluding crypto titans Bitcoin (BTC) and Ether (ETH), memecoin market share jumps from 4.2% to 11.21%.
This equates to a huge amount of money, with more than $140 billion in market value hidden in cryptocurrencies that have no practical purpose, according to data from CoinGecko. Because they are highly unstable in nature, they tend to be named after animals, popular internet jokes, and political figures and events.
Meme coins are also surging as Bitcoin crosses the $100,000 mark for the first time. Dogecoin has soared 168% since President Donald Trump's election spurred the entire crypto market. Dogecoin is currently the seventh largest cryptocurrency with a market capitalization of $64 billion, according to data from CoinDesk.
The question is: Is this how things work in the early stages of the recent bull market, or is it a sign that things are about to heat up?
“In previous cycles, memecoins have typically experienced their greatest capital turnover towards the end of a bull market following a halving,” Alexander Keriya, vice president of product management at CEX.IO, said in an email. told CoinDesk.
A “halving” refers to a quadrennial event in which the reward for mining Bitcoin is reduced by 50% (the most recent event was in early 2014). This often correlates with cryptocurrency profits.
“However, this cycle stands out because the significant rise in memecoin influence occurred well before the halving and persisted during Bitcoin’s mid-year consolidation period,” Keliya said. added.
Dogecoin, the oldest meme coin, was created as a joke in 2013 and gained a lot of attention during the bull market that ended in 2021 after Tesla CEO Elon Musk repeatedly posted it on social media. Other dog-themed coins like SHIB rode on DOGE's tail, reaching billions of dollars in valuation. Over time, meme coins have come to be considered a cryptocurrency investment category in their own right, along with decentralized finance (DeFi) tokens, artificial intelligence tokens, and privacy coins.
“Memecoins may eventually reach a plateau similar to DeFi, but the market is still in the process of determining where that equilibrium will be established,” Keliya wrote.
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According to the report, the memecoin sector experienced explosive growth earlier this year, with the number of daily projects deployed on Pump.fun, a Solana-based crypto project that allows users to easily issue tokens. , an increase from several dozen cases per year. In February, the number rises to several thousand per day, and in March, it reaches several thousand. Currently, more than 60,000 meme coins are created every day, half of which are created through Pump.fun, the report said.
According to the report, memecoins as a sector grew by 330% in total market capitalization from January 1st to December 1st. For comparison, Bitcoin is up 140% year-to-date and Ethereum is up 71%. Memecoin trading volume increased by 979% over the same period and now accounts for 5.27% of the total cryptocurrency market trading volume. Additionally, meme coins maintained significant volume in June while other sectors of the crypto economy declined.
“The growth of memecoins as a gateway to new investors highlights the growing influence of retail-driven narratives in the crypto market. As a sentiment bet, this is a sign of market optimism. “This reflects expectations for a continuation of the bull market after the halving,” Keliya said. I wrote. “However, an increase in the share of meme coins also highlights the possibility of speculative bubbles emerging sooner. This could amplify the intensity of the bull market, but could shorten its duration. There is also.”
The meme coin sector has changed over the years. In 2021, Dogecoin and Shiba Inu dominated trading volume and market capitalization. In contrast, 2024 saw the emergence of a variety of new meme coins, including Dogwife Hat (WIF), Bullet (BRETT), Peanuts the Squirrel (PNUT), and Popcat (POPCAT). Crack (or close to) the top 100 coins by market cap.
And while until March, the majority of the largest meme coins were dog-themed, cat-themed tokens and AI-themed tokens are taking market share away from dog tokens. Political meme coins also did well until the US presidential election in November, but trading volume has since declined by 80%.
The networks in which trading activities take place have also changed. Dogecoin has its own proof-of-work blockchain that mimics the Bitcoin network. Ethereum-based meme coins such as pepe (PEPE) and MAGA (TRUMP) have also gained some popularity. But Solana will be the big winner of the memecoin boom in 2024, thanks to Pump.fun. The network accounts for 30% of the sector's trading volume, and 15% of memecoin's market capitalization is based on the network.
However, memecoin trading volume on Telegram's TON network has increased 750x in the past six months, even though blockchain accounts for only 1% of the total memecoin market capitalization.
“Given meme coins’ ability to drive retailer engagement and revenue generation for DeFi platforms, we could see stronger integration between Launchpad and decentralized exchanges in 2025 to capitalize on this trend.” wrote Keliya. “However, in an ecosystem like Solana, over-reliance on meme coins is raising concerns and could ultimately backfire and strain its widespread development.”
