A recent report from crypto exchange Bybit reveals that meme coins are becoming increasingly important in crypto portfolios. The report, titled "Beyond the Hype: The Realities of Institutional Memecoin Investments," covers data from January 1 to May 1 and shows a growing interest in meme coins among both institutional and retail investors.
According to the report, institutional investors were quick to embrace meme coins as the trend reached its peak in March. From February to March, institutional memecoin holdings saw a significant increase of 226%, reaching $204 million. In April, these holdings grew even further, reaching a total of $293.7 million.
However, as market sentiment turned negative, institutional investors "aggressively sold off" half of their memecoins. By the end of the period, their allocation stood at $139 million, which is 125% higher than the start of the year, indicating a belief in the return of extreme risk-taking.
Retail investors also experienced a surge in memecoin holdings during the peak of memecoin mania in April. From February to April, their holdings increased by a staggering 478%, reaching $371 million. However, they too sold off their memecoins, reducing their allocation from $567 million.
The report also highlights the popularity of dogecoin (DOGE) among both retail and institutional investors. DOGE accounts for 36.17% of institutional meme coin holdings and 24.58% of retail meme coin holdings. Ethereum-based meme coins are also favored by both groups, with retail investors holding 20.95% in PEPE and 14.61% in SHIB, compared to institutions' 22.23% in PEPE and 10.39% in SHIB.
Furthermore, the report emphasizes the difference in investment strategies between retail and institutional investors. Retail investors allocate a larger portion (4%) of their portfolios to meme coins compared to institutions (2.5%). However, both groups predominantly invest in established meme coins with a longer track record. The report specifically mentions the iconic status and strong performance of DOGE, as well as the interest in BONK from institutional investors.
What are your thoughts on the report's findings regarding institutional and retail holdings of meme coins? Let us know in the comments section below.