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VanEck’s MarketVector has introduced a new index dedicated to meme coins. The MarketVector’s Meme Coin Index, which trades under the symbol MEMECOIN, tracks the performance of the top six meme tokens in the market.
Notably, the MEMECOIN index has seen remarkable growth, boasting an impressive 195% surge on an annual basis. It includes prominent meme tokens such as Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE), among others.
Launching at the end of April and tracking historical prices for the index back to 2021, the index confers an air of legitimacy to the memecoin market, with the assets under management being reviewed at the end of each month.
Combined, these holdings represent a significant portion of the meme coin market, with CoinGecko reporting a total market capitalization of $51 billion. MarketVector’s index tracks approximately $44.67 billion of this market cap.
The index’s leader is Dogecoin (DOGE), with a weight of 30.77%, showcasing its well-established presence in the meme coin landscape.
Following closely is Shiba Inu (SHIB) at 28.34%.
The remaining weightings are attributed to relative newcomers Pepe (PEPE) at 14.51%, Dogwifhat (WIF) at 12.54%, Floki Inu (FLOKI) at 7.14%, and BONK at 6.7%.
Despite a recent minor dip, the meme coin index has experienced a remarkable surge of over 202% in the past year, offering a glimpse into the explosive growth and speculative interest surrounding this unique segment of the crypto market.
Meme Super Cycle
The ongoing bull cycle in the cryptocurrency market has seen a remarkable surge in the memecoin sector, outperforming other sectors by significant margins in the first quarter of the year.
Investors and analysts have been discussing the emergence of a “meme coin super cycle” in recent months, anticipating a substantial increase in memecoin valuations. While similar claims have been made during previous cryptocurrency bull runs, those who positioned themselves strategically in the past reaped substantial profits.
What sets the current meme coin frenzy apart is the growing interest from venture capital groups and hedge funds. These institutional investors are increasingly exploring meme coin investments, driven by the desire to capture the extraordinary returns often associated with the sector.
> @vaneck_us launches its own Memecoin Index.
Quick Facts:
– 30% cap on component weight
– Components include: $DOGE, $SHIBA, $PEPE, $WIF, $FLOKI, $BONK
– Monthly Reviews"Intended for entertainment purposes"
It's a meme supercycle, and they just told you what to bet on. pic.twitter.com/Mk57AhKW9y
— Emperor Osmo🧪 (@Flowslikeosmo) May 8, 2024
Additionally, the surge in popularity of meme coins such as Dogecoin and Shiba Inu in 2021 has familiarized many small investors with the concept, fueling further curiosity and participation.
Another factor contributing to the meme coin supercycle narrative is the potential impact of inflation and the Federal Reserve’s efforts to control it.
Advocates suggest that the Fed is likely to cut the prime interest rate at least once in 2024, resulting in reduced borrowing costs. With more capital available for riskier investments, meme coins are seen as an attractive option for those seeking speculative opportunities.
Furthermore, a sense of economic discontent among younger crypto investors is driving their interest in meme coins. Many of these investors face significant financial barriers to achieving their life and financial goals, particularly in areas like home ownership.
This discontent has led to a growing nihilistic outlook and a belief that meme coins offer a chance at life-changing returns.
Consequently, this demographic’s desire to invest in the riskiest corners of the cryptocurrency market is expected to intensify the meme coin bull market, even after the catalysts for Bitcoin have played out.
Solana Emerges as Preferred Blockchain for Meme Coins
The world of meme coins has experienced significant growth this year, with Solana, a blockchain platform known for its low transaction costs, emerging as a preferred venue for these speculative cryptocurrencies.
Analysts expect Solana to remain the preferred blockchain for meme coins due to the low fees associated with it, enabling users to make small investments that could potentially yield substantial profits — a characteristic that sets it apart from previous market manias hindered by high Ethereum fees.
Furthermore, a new category of meme tokens called PoliFi has gained attention in recent times, with its market capitalization skyrocketing to $586 million as the election season heats up.
Notably, specific tokens such as BODEN have experienced a 16% increase following a comment made by former President Donald Trump at a campaign event.
Similarly, Trump-themed tokens like MAGA and STRUMP have had recent surges.
The Bottom Line
With VanEck’s MarketVector’s new index tracking the performance of the top six meme coins, it leads to thoughts about a ‘meme super cycle’ — with institutions eyeing up potential returns from everyone’s favorite meme coins.
The Index points out right at the top of its webpage that these coins are “for entertainment purposes only”, but when there’s money to be made, people will be looking for their way in.
With the index tracking about $44.67 billion of the meme coin market’s total $51 billion capitalization, it shows how the six largest meme coins lead the pack.
