Why meme coins are fading this cycle: A tale of Bitcoin and the others

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Meme coins ranked among the most popular crypto narratives of 2024, creating a divide between crypto tokens. Bitcoin stands out among top crypto tokens with 125% year-to-date gains, and the meme coin category, or the “other tokens”, hit a key milestone, crossing a market capitalization of $100 billion. 

Bitcoin vs meme coins, most popular narrative of 2024

Meme coins captured the attention of most crypto traders and emerged as a popular narrative this year. A CoinGecko report updated on Monday notes that the meme coin narrative captured a combined 30.67% of global investor interest.

The report highlights that almost a third of crypto narrative interest this year was focused on speculative gains from meme coins. Traders placed a lower emphasis on fundamentals and turned their attention and capital towards dog and cat-related meme coins, pop culture references and internet personality-themed meme tokens.

Meme coins have enjoyed a 6% year-on-year increase in interest from crypto market participants. While Bitcoin garnered institutional attention and capital allocation following the approval of Spot BTC ETFs in the US, four meme coin-based trends ranked among the top 20 narratives in crypto. 

Solana  Base, Artificial intelligence and cat-themed meme coins garnered between 14% and 8% of interest among crypto narratives. 

With meme coins cementing their place as a trending token category and trending this cycle, catalysts like institutional allocation and ETF approval could pave the way for further gains for holders.

Base, Solana, XRP memes dominate over blue-chip memes in speculative gains 

In the first week of December, XRP-based meme coins yielded gains for holders amidst rising relevance and demand for the XRP Ledger and its native token XRP. Similarly, Solana and Base-based meme coins have secured a rank in the top 20 cryptocurrency narratives of the year, dominating the popularity of blue-chip meme coins. 

Dogecoin, SHIB and PEPE are typically considered blue-chip memes, with a market capitalization between $7 and $46 billion, as seen on CoinGecko. The top 3 tokens in the meme coin category observed a spike in active addresses and activity from traders within the first two weeks of December.

In the last seven days, the top 3 tokens have erased double-digit value, according to CoinGecko data. Several other meme tokens have accumulated double-digit losses, barring Pudgy Penguins (PENGU). 

Institutional meme coin holdings tripled this year 

Dogecoin ETF likely in 2025?

Rising institutional adoption has raised questions about the likelihood of approval from the U.S. financial regulator, the Securities and Exchange Commission, for meme coin ETFs. Nate Geraci, President of ETFStore expressed shock that an issuer has yet to file for a Dogecoin ETF, both in and outside of the U.S.

Geraci believes the only possible downside of such a filing would be that it would mark a futile attempt and end up as a marketing expense for an issuer. The President of the ETFStore commented on the “DOGE” ticker since it is the ticker for the largest meme coin and would likely hold the highest relevance and demand among issuers in the future

The wave of meme coin adoption drove institutions to tripe their holdings in the category. From February to March 2024, institutional investors’ spot holdings of memecoins climbed from $62.5 million to $204.8 million. 

This marks a 226% surge, a significant spike in interest in the memecoin market, according to Bybit’s report on institutional investment in meme coins.