Memecoins Reach $140B Market Cap and Gain Ground in Crypto Economy

Memecoins are undoubtedly attracting a number of consideration from crypto observers – even when not everyone seems to be a fan of them. However information reveals they’re additionally gobbling up a rising share of the crypto financial system.

The sector – powered by dogecoin (DOGE) and Shiba Inu (SHIB) – represented 3.16% of the mixed market capitalization of all cryptocurrencies as of December 1, up from 1.3% initially of the 12 months, based on a brand new report from crypto trade CEX.IO. In the event you exclude the crypto titans bitcoin (BTC) and ether (ETH), memecoin’s market share jumps from 4.2% to 11.21%.

That quantities to huge {dollars}: greater than $140 billion in market worth, according to CoinGecko datasaved in cryptocurrencies that don’t faux to have any use. They’re extraordinarily ephemeral in nature and are sometimes named after animals, viral web jokes and political figures or occasions.

Now that bitcoin crosses the $100,000 mark for the primary time, memecoins are additionally skyrocketing. Dogecoin has risen 168% for the reason that election of Donald Trump boosted the crypto market. In response to information from CoinDesk, Dogecoin is now the seventh largest cryptocurrency by market capitalization with a price of $64 billion.

The query is whether or not that is precisely how issues work nowadays within the early levels of a bull market, or whether or not it is a harbinger that issues have overheated.

“In earlier cycles, memecoins usually skilled their largest capital rotation in direction of the top of the bull run after the halving,” Alexandr Kerya, vp of product administration at CEX.IO, instructed CoinDesk in an e-mail.

“Halving” refers to an occasion that occurs as soon as each 4 years – the newest was in early 2014 – the place the reward for mining bitcoin is lower by 50%, which regularly correlates with crypto features.

“Nevertheless, this cycle is notable for the numerous improve in memecoins’ affect that occurred nicely earlier than the halving and continued even throughout bitcoin’s mid-year consolidation,” Kerya added.

The oldest memecoin, dogecoin, was created as a joke in 2013 and gained a number of consideration through the bull market that resulted in 2021, when Tesla CEO Elon Musk repeatedly posted about it on social media. Different dog-themed cash, comparable to SHIB, rode on the tails of DOGE and reached billions of {dollars} in valuations. Over time, memecoins got here to be thought of a crypto funding class in their very own proper, in the identical vein as decentralized finance (DeFi) tokens, synthetic intelligence tokens, or privateness cash.

“Whereas memecoins could ultimately attain a plateau much like DeFi, the market remains to be figuring out the place that equilibrium might be established,” Kerya wrote.

Consuming up market share

The memecoin sector skilled explosive progress early this 12 months, the report mentioned, because the every day variety of tasks deployed on Pump.enjoyable – a Solana-based crypto challenge that makes it simple for customers to launch tokens – rose from a number of dozen per day. February to hundreds per day in March. At present, greater than 60,000 memecoins are created daily, half of them via Pump.enjoyable, the report mentioned.

As a sector, memecoins noticed their mixed market capitalization improve by 330% within the interval from January 1 to December 1, the report mentioned. By comparability, bitcoin is up 140% for the reason that begin of the 12 months, whereas ether is up 71%. Memecoin buying and selling quantity grew by 979% over the identical interval and now accounts for five.27% of the amount of all the crypto market. Moreover, memecoins maintained vital quantity in June, whereas different sectors of the crypto financial system noticed a decline.

“As a gateway for brand new traders, the expansion of memecoins highlights the growing affect of retail-driven narratives within the crypto market. As a sentiment, it displays the market’s optimism and expectations of a continuation of the rally post-halving,” says Kerya. wrote. “Nevertheless, with the elevated share of memecoins, this additionally highlights the potential for speculative bubbles to emerge extra shortly. Whereas this might improve the depth of a bull run, it might additionally shorten its period.”

The memecoin sector has modified over time. Dogecoin and Shiba Inu dominated buying and selling quantity and market cap in 2021. In distinction, 2024 noticed all kinds of newer memecoins – comparable to dogwifhat (WIF), Brett (BRETT), Peanut the Squirrel (PNUT) and Popcat (POPCAT) – crack ( or near) the highest 100 cash by market cap.

And whereas the vast majority of the most important memecoins have been dog-themed till March, cat-themed and AI-themed tokens have stolen market share from canine tokens. Political memecoins additionally carried out nicely through the US elections in November, after which buying and selling quantity fell by 80%.

The networks on which buying and selling actions happen have additionally modified. Dogecoin has its personal proof-of-work blockchain, which mimics that of the Bitcoin community. Ethereum-based memecoins comparable to pepe (PEPE) and MAGA (TRUMP) have additionally gained some reputation. However Solana is the massive winner of the memecoin craze in 2024 due to Pump.enjoyable; the community accounts for 30% of the trade’s buying and selling quantity, and 15% of memecoin’s market capitalization relies on it.

Nevertheless, memecoin buying and selling quantity from Telegram’s TON community has grown 750 instances over the previous six months, regardless that the blockchain nonetheless solely accounts for 1% of the overall memecoin market capitalization.

“Given memecoins’ capacity to extend retail engagement and monetization for DeFi platforms, stronger integrations between launch pads and decentralized exchanges might happen in 2025 to capitalize on this development,” Kerya wrote. “Nevertheless, in ecosystems like Solana, the heavy reliance on memecoins has raised considerations and will in the end backfire, placing stress on their broader growth.”