Memecoins are undoubtedly capturing a large segment of cryptocurrency watchers’ attention — even if not everyone is a fan. But data shows they are eating up an increasing amount of the cryptocurrency economy as well.
Sector – backed by the likes of Dogecoin (Doug(and Shiba Inu)Gray) – It accounted for 3.16% of the combined market cap of all cryptocurrencies on December 1, up from 1.3% at the beginning of the year, according to a new report. a report From cryptocurrency exchange CEX.IO. If you exclude crypto giants Bitcoin (Bitcoin) and ether (Ethereum), memecoin’s market share jumped to 11.21% from 4.2%.
This equates to big dollars: more than $140 billion in market capitalization, According to CoinGecko datahidden in cryptocurrencies that don’t pretend to have any benefit. They are very skittish by nature, tending to name names of animals, viral Internet jokes, and political figures or events.
As Bitcoin topples the $100,000 threshold for the first time, memcoins are also skyrocketing. Dogecoin is up 168% since the election of Donald Trump galvanized the cryptocurrency market worldwide. Dogecoin is now the seventh-largest cryptocurrency by market cap at $64 billion, according to CoinDesk data.
The question is whether this is the way things are going in the early stages of a bull market these days, or if it is a harbinger that things are getting overheated.
“In previous cycles, memes typically saw the largest capital turnover at the end of the post-halving rally,” Alexander Kiria, vice president of product management at CEX.IO, told CoinDesk via email.
The term “halving” refers to the once-every-four-years event — the last one was in early 2014 — when the Bitcoin mining reward is cut by 50%, which is often associated with cryptocurrency gains.
“However, this cycle stands out because of the spike in memecoin impact that occurs long before the halving, and continues even during Bitcoin’s mid-year consolidation,” Kiria added.
The oldest memocoin, Dogecoin, was created as a joke in 2013 and gained significant attention during the bull market that ended in 2021 as Tesla CEO Elon Musk repeatedly posted about it on social media. Other dog-themed coins, like the SHIB, have worn DOGE’s coat tails and have been worth billions of dollars. Over time, memes have come to be considered a cryptocurrency investment class in their own right, in the same vein as decentralized finance (DeFi) tokens, AI tokens, or privacy coins.
“Although memes may eventually reach a plateau, similar to DeFi, the market is still in the process of determining where to establish this equilibrium,” Kiriya wrote.
The memecoin sector saw explosive growth early this year, when the daily number of projects published on Pump.fun — a Solana-based cryptocurrency project that makes it easier for users to launch tokens — dropped from a few dozen per day in February to thousands per day in, the report said. March. At present, more than 60,000 memcoins are generated daily, half of them through Pump.fun, the report said.
As a sector, memecoins saw a 330% increase in their combined market value during the period from January 1 to December 1, the report said. By comparison, Bitcoin is up 140% since the beginning of the year, while Ethereum is up 71%. Memecoin trading volume grew by 979% in the same period, and now represents 5.27% of the entire cryptocurrency market volume. Furthermore, memecoins maintained significant volume in June while other sectors of the cryptocurrency economy saw declines.
“As a gateway for new investors, the growth of meme currencies highlights the growing influence of retail-driven narratives in the cryptocurrency market. As a bet on sentiment, it reflects market optimism and expectation of continued rally after the halving,” Kiriya wrote. “However, as the share of memcoins increases, it also highlights the possibility of speculative bubbles emerging faster. While this could amplify the intensity of the uptrend, it could also shorten its duration.”
The memecoin sector has changed over the years. Dogecoin and Shiba Inu dominated trading volume and market capitalization in 2021. In contrast, 2024 saw a wide range of newer meme coins – such as dogwifhat (WIF), Brett (BrettPeanut and squirrel (Girls) and bobcat (Bobcat) – Break (or come close to) the top 100 coins by market cap.
While the majority of larger meme coins were dog-themed until March, cat-themed tokens and AI were stealing market share from dog tokens. Political meme coins also performed well in the US elections in November, after which they saw an 80% drop in trading volume.
The networks in which business activity occurs have also changed. Dogecoin has its own proof-of-work blockchain, which mimics the Bitcoin network. Ethereum-based meme currencies such as Pepe (baby) and Maja (Trump) also saw some popularity. But Solana, thanks to Pump.fun, is the big winner in the memecoin craze in 2024; The network represents 30% of the sector’s trading volume, and 15% of the memcoin’s market value depends on it.
However, memecoin trading volume on Telegram’s TON network has grown by 750 times in the past six months, even though the blockchain still represents only 1% of the total memecoin market capitalization.
“Given the ability of memcoins to boost retail engagement and generate revenue for DeFi platforms, 2025 could see stronger integrations between launch platforms and decentralized exchanges to capitalize on this trend,” Kiriya wrote. “However, in ecosystems like Solana, heavy reliance on memecoins has raised concerns and may ultimately backfire, straining their broader development.”
