Memecoins surge to 3.16% market share in cryptocurrency

Memecoins have seen a significant rise in their market share within the cryptocurrency sector, capturing attention from investors and enthusiasts alike. 

Recent data reveals that memecoins represented 1.3% of the total market value at the start of the year but increased to 3.16% by December 1.

Excluding Bitcoin (CRYPTO:BTC) and Ether (CRYPTO:ETH), their market share surged from 4.2% to 11.21%, indicating a growing influence in the crypto landscape.

Projects like Pumpfun, built on the Solana network, have contributed to this growth, with daily memecoin creation skyrocketing from dozens to thousands since February.

Currently, over 60,000 memecoins are created daily, with around half originating from Pumpfun.

The total market capitalization of memecoins has exceeded $140 billion, driven by their inherent volatility and appeal.

Typically themed around animals, internet memes, or political figures, memecoins have experienced a 330% increase in market cap from January to December, while Bitcoin and Ether rose by 140% and 71%, respectively.

While established memecoins like Dogecoin (CRYPTO:DOGE) and Shiba Inu (CRYPTO:SHIB) have dominated the market, new entrants with diverse themes are emerging in 2024.

These include tokens focused on cats, artificial intelligence, gaming, and political themes.

Alexandr Kerya noted that historically, significant capital rotation in memecoins occurs at the end of bull runs following halving events.

However, this time around, memecoins gained traction even before the halving.

The Solana network has emerged as a major player in this trend, while Telegram’s TON (CRYPTO:TON) network has seen a dramatic increase in trading volume.

As memecoins serve as an entry point for many individual investors into cryptocurrency, it is crucial for potential investors to evaluate their high volatility and associated risks carefully.

Allocating only a small portion of an investment portfolio to memecoins may be advisable as the market continues to evolve.