As a seasoned crypto investor with a keen interest in memecoins, I find the Bybit report on institutional involvement in this segment intriguing. The rapid growth of institutional holdings in memecoins is a testament to their appeal and potential for quick wealth multiplication, especially during bull runs.
In a report published by Bybit on June 4th, it was noted that memecoins have gained significant appeal among institutional investors using their platform, mirroring this trend in other markets. The allure of meme coins extends beyond their entertaining characters, as they offer the potential for rapid wealth growth, particularly during market upswings. Institutional investors are embracing this trend.
Based on the findings in the report, the value of institutional investments in memecoins through spot holdings surged by an impressive 226% in March, reaching a substantial $204 million. Subsequently, April witnessed an additional increase, bringing the total institutional memecoin holdings to an impressive $297 million. However, following market corrections, most institutions chose to sell off their memecoin investments for profits.
This illustrates the increasing acceptance of risk-taking behaviors by institutions towards the unpredictable crypto market, particularly in the case of volatile assets like DOGE. Despite this, they favored engaging extensively with DOGE due to its popularity as a meme token and comparatively larger liquidity and stability.
As an analyst, I’ve discovered that PEPE was among the memecoins attracting institutional investors, based on data collected on May 1, 2024. The holdings of these investors in PEPE amounted to 22.23%. This was lower than their holdings in DOGE at 36.17%, and SHIB at 10.39%. Interestingly enough, BONK had gained favor with institutional investors due to its sudden surge in popularity, becoming their fourth largest holding with a total investment of $74.5 million.
Institutions have kept their investments focused on established top assets, shying away from exploring new memcoins due to risk considerations. In contrast, retail clients on Bybit have shown a strong appetite for acquiring recently introduced tokens with a long-term perspective.
Large institutions often invest heavily in popular meme cryptocurrencies and sell their holdings during market downturns as a more sophisticated approach to their crypto investments. In contrast, individual retail investors typically buy smaller quantities of newer tokens with the hope of earning significant profits over time.
Image by Kevin_Y from Pixabay
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2024-06-07 14:18