The world of memecoins exploded this year, with over 75% of all memecoins ever created launching this year. But 97% of these tokens are now inactive and not trading at all.
The rise of memecoins
Binance Research shared a new report, and revealed that memecoins now represents 11% of the altcoin market cap, up from just 4% in 2022.
This growth highlights how much these joke tokens have captured the attention of investors, but it’s worth noting that only a tiny fraction—just 0.23%—of these memecoins still have a market cap exceeding $1 million.
Joshua Wong, a macro researcher at Binance, described memecoins as embodying both the best and worst aspects of the web3 space.
He pointed out that while they aim to reflect core principles like fairness and decentralization, they also show a strong focus on profit over genuine technological advancement.
Who let the dogs out?
Memecoins peaked in popularity back in 2021 when Dogecoin and Shiba Inu skyrocketed to market caps of $80 billion and $39 billion, respectively.
This boom was largely fueled by social media hype and endorsements from high-profile figures like Elon Musk.
Fast forward to 2024, and we’re seeing new contenders like dogwifhat, a Solana-based memecoin that hit a $1 billion market cap just 104 days after its launch.
For perspective, Shiba Inu took 279 days to reach that milestone, while Dogecoin took eight years!
Memecoins are trading at a much higher velocity compared to other crypto segments. Research from ArkStream Capital shows that meme tokens average daily trading volumes that amount to about 11% of their total market cap.
In comparison, DeFi tokens see about 5%, Layer 2 tokens around 7%, and Layer 1 networks about 4%.
Big community, big hype, big money
This high trading activity has made memecoins a quite attractive option for centralized exchanges looking to boost their volume.
Currently, they account for about 20% of the top 30 trading pairs by volume on Binance.
As of the third quarter of 2024, memecoins collectively boast a market cap of around $50 billion and are driving approximately $5 billion in daily trades.
