Institutional investors on the crypto exchange Bybit have significantly increased their investments in meme coins, with allocations soaring to nearly $300 million in April from $63 million at the beginning of the year.
Surge in Meme Coin Investments
According to Bybit’s recent report, institutional allocations to meme coins have jumped over 300% this year, peaking at almost $300 million in April. This surge indicates a newfound interest in the sector among professional investors. Popular meme coins like dogecoin (DOGE) and shiba inu (SHIB) have been the top picks, primarily due to their high liquidity in the spot market. The report exclusively tracks holdings on Bybit, excluding other exchanges.
Rising Popularity of Solana’s BONK
Solana’s meme token, BONK, has emerged as a favorite among the new meme coins, attracting over $75 million in institutional investments. However, in May, holdings dropped by nearly half to $125 million as institutions took profits.
Shift in Investment Patterns
During this period, stablecoin holdings decreased from $1.7 billion to $1.4 billion, while investments in bitcoin (BTC), ether (ETH), and meme coins increased. As of May 1, DOGE held the largest share of meme coin holdings for both retail and institutional investors. Institutions allocated a larger proportion of their funds to DOGE, with 36% compared to retail investors’ 24.5%.
Institutional Preference for DOGE
“This suggests that while both groups view DOGE as a staple asset within the meme coin space, institutions favor it more, possibly due to its higher liquidity and relative stability,” Bybit noted. Both retail and institutional investors also hold Ethereum-based meme coins like PEPE and SHIB. Retail investors’ allocations are 20.95% and 14.61% respectively, compared to institutions’ 22.23% and 10.39%.
Growth of Meme Tokens in Blockchain Ecosystems
In recent months, meme tokens from the Ethereum and Solana ecosystems have gained prominence as a means to bet on the growth of blockchain technology. This trend reflects a broader interest in the potential of these digital assets to drive innovation and growth within the crypto space.
