The memecoin season continues to move forward undeterred as Bitcoin's bullish momentum stalls.
According to anonymous analyst Crypto Coryo, data tracking site CoinMarketCap listed a record 138 memecoins in April, extending a parabolic rise from 18 in April 2023. Even that number could be much higher, as CoinMarketCap reportedly only lists 10% of all tokens.
At the time of writing, 2,229 memecoins were listed on CoinMarketCap, boasting a total market capitalization of more than $50 billion, nearly equal to the market value of investment banking giant JPMorgan (JPM) and its US electric car manufacturer Tesla (TSLA).
It's an impressive achievement, as memecoins are often criticized for lacking utility or practical use cases and are considered to represent pure speculation.
“In principle, people participate in memecoins because (i) the value can increase, (ii) they feel democratic and open to anyone participating, and (iii) they are happy,” Vitalik Buterin – the founder of leading smart contract blockchain Ethereum, which is also home to several popular memecoins, said in a blog post.
Arthur Hayes, co-founder, former CEO of exchange BitMEX and chief investment officer at Maelstrom, advocates for a deeper understanding of memecoins as a driver of blockchain ecosystem growth.
Hayes said in an interview with Real Vision on March 30:
“You can consider these things to be worthless, but if it brings attention and more engineers into the space, then that is a positive value for the chain itself.”
Number of memecoins registered per month by chain on CoinMarketCap | Source: Crypto Coryo
The Solana programmable blockchain is cheaper and faster than rival Ethereum, which has been the new home for these tokens since late last year. At one point in the first quarter, the meme craze led to record network activity on Solana, pushing the SOL price above $200 for the first time since November 2021.
“Due to high gas fees, high-risk activity is somewhat shifting away from Ethereum. We saw that with Bonk on Solana and Bald on Base. Solana is now the home of memecoins,” noted Crypto Coryo.
Speculators pursue PEPE
Bitcoin's recent harsh price action has speculators chasing the popular meme token PEPE. The token has increased nearly 10% in seven days.
Additionally, it has the second-highest ratio of perpetual futures open interest (OI) to market capitalization, according to data tracked by Paris-based Kaiko. Dogifwhat (WIF) is also a memecoin with the highest OI to market capitalization ratio.
“Pepe (PEPE) and Dogwifhat (WIF) have double the ratio of other altcoins. Higher ratios indicate that the derivatives market positioning for an asset is large relative to its market capitalization, making price discovery for these tokens more focused on the perpetual futures market. Kaiko said in the weekly newsletter.
Nominal OI refers to the dollar value locked in the number of active or open futures contracts.
Top Cryptocurrencies OI to Market Cap Ratio | Source: Kaiko
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