In the dynamic world of cryptocurrency in 2024, meme coins have been a captivating narrative, yet signs of their fading are emerging.
Bitcoin has been a standout performer, with year-to-date gains of 125% and currently consolidating close to $95,000, just 12% below its all-time high of $108,353. Meanwhile, the meme coin category reached a significant milestone, crossing a market capitalization of $100 billion.
Among the top meme coins, Dogecoin, Shiba Inu, and Pepe have seen a downturn. In the past week, they have erased between 11% and 13% of their value.
A CoinGecko report indicates that the meme coin narrative grabbed 30.67% of global investor interest this year, showing a 6% year-on-year increase. Four meme coin-based trends are among the top 20 crypto narratives. Despite meme coins becoming a trendy token category, and with potential catalysts like institutional allocation and ETF approval, their recent performance has been lackluster.
In the first week of December, some meme coins based on XRP, Solana, and Base showed promise. However, the so-called blue-chip meme coins like Dogecoin, SHIB, and PEPE, with market caps between $7 and $46 billion, saw a spike in activity in early December but have since suffered double-digit losses in the last seven days.
Institutional interest in meme coins has grown significantly. From February to March 2024, their spot holdings tripled from $62.5 million to $204.8 million, a 226% surge, as per Bybit’s report.
The possibility of a Dogecoin ETF in 2025 is being discussed. Nate Geraci of ETFStore is surprised that no issuer has yet filed for a Dogecoin ETF, speculating that the only downside might be a potential marketing expense. With the SEC’s approval of a Bitcoin-Ethereum hybrid ETF, DOGE traders are hopeful for a Dogecoin ETF approval next year.
Ruslan Lienkha from YouHodler points out that Dogecoin’s performance is mainly speculative, driven by its connection to Elon Musk, lacking substantial real-world use cases compared to Bitcoin, which is seen as “digital gold” and a hedge against fiat currency devaluation. The divide between Bitcoin and meme coins could impact meme coin ETF approvals, institutional investment, and retail participation in the ongoing bull market.
Historically, a Bitcoin drawdown often leads to a steeper market correction, negatively affecting meme coins.
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