The State of Memecoins in 2024
By Will McKinnon February 1, 2024
- Dogecoin popularized the concept of memecoins, which are worth billions of dollars today.
- Most memecoin trading happens on Ethereum and Solana, however other networks are starting to get popular.
Since Dogecoin first popularized the concept of memecoins in 2013, crypto traders have poured billions of dollars into what normal people would consider to be worthless scams. The interesting thing is, even most of the traders buying these coins would agree they have no worth - so why are people buying them? While some offer access to special communities or other minor utilities, at the end of the day people buy memecoins because they think they'll be able to sell them at a higher price.
With the market turning as bullish as it currently is, Beluga wanted to take a dive into the current landscape of memecoins on the top two chains, Ethereum and Solana. As more liquidity comes into the market, memecoins will likely see big inflows, so it's important to have an idea of what the space looks like now.
Historically ETH has been the center of most on-chain trading, so it makes sense it would be the home to many of the largest memecoins. However, this hasn't really been the case during this bullish cycle so far. With the price of ETH lagging behind, it seems the memecoin traders who seek volume above all else have taken a good chunk of their business elsewhere. A lot of the more established memecoins on ETH have taken a downwards turn as a consequence, however typically these rotations are pretty short term and so this may represent a buying opportunity.
Pepe has emerged to be the leader of all ETH memecoins, after skyrocketing to almost $2B market cap in May 2023. It may sound insane to you that a coin with $0 of value could be worth billions, but that's just crypto for you. While it has now slid down quite a bit from its peak, it remains a strong cultural force for the Ethereum community.
Ticker BITCOIN Logo, Source: CoinMarketCap
Other tokens like $MOG and HarryPotterObamaSonic10Inu (more commonly known by its ticker $BITCOIN) have also made names for themselves and remain strong communities today. If we're being honest though, looking at their charts things look pretty rough. We'd recommend watching for ETH on-chain activity start to return (cross-chain flows can be viewed here ) and see how these coins perform. If they do not catch a bid, it's likely that shiny new coins will be better opportunities.
While Solana's history of memecoins may not be as vast as Ethereum's, for the last few months Solana has pretty much dominated the memecoin market. Bonk coin led the way with its run to $1B after getting listed on Binance and Coinbase, and was responsible for sparking a massive memecoin frenzy. The biggest winner of the Bonk run has been Dogwifhat $WIF which reached a $500M market cap in just 2 months. Trading volume on Solana DEX's has also far outperformed what anyone imagined, having actually flipped the volume of Ethereum for the first time ever.
This means that most of the daily "pump and dump" coins are being traded on Solana. While these are obvious scams and holding them for any extended period of time is likely to lose you money, a lot of crypto traders enjoy gambling on the off-chance they hit one that turns out to be the next Bonk or Pepe. With a number of large airdrops including Jupiter recently hitting the Solana ecosystem, it's likely the on-chain shenanigans will continue.
Alt Layer 1's
One of the more interesting memecoin markets recently have been on alt chains like Sei. While the chains themselves are small relative to Ethereum and Solana, Bonk's run showed that all a chain needs to get users to bridge over is a token that goes up. With that formula in mind, a number of chains rushed to get memecoins out including Arbitrum and Sei.
It seems like this fad is going to continue, with chains like Sui and Aptos now focusing efforts on memecoins and more "degen" focused elements of their networks. With this in mind, it might be a good idea to look at mid-size chains that haven't had their moment in the spotlight and do not yet have a chain-defining memecoin. This is a risky strategy, however the rewards for being right are significant.
Fresh liquidity in the market has made memecoins more interesting recently, but it seems that most of the attention is focused on playing hot potato with coins that sprout up every day. Sentiment is definitely better in the trenches than it was a year ago but you can't forget the memecoin market is PvP. It's a high risk market with high rewards, but if you take the approach of trying to front run liquidity flows rather than trying to catch whatever happens to be trending, you may find it's a whole lot easier.