The MarketVector Meme Coin Index has experienced a remarkable surge of over 137% since the beginning of 2024, as the leading memecoins continue to rise in popularity. In comparison, the S&P 500 index has only seen a modest 9.3% price appreciation year-to-date, according to TradingView data.
The memecoin index has not only outperformed the S&P 500, but it has also shown impressive gains of 186% over the past year. As of 8:52 am UTC, it is currently trading at $76.60. MarketVector, a subsidiary of VanEck, a prominent asset management company in the United States, launched the memecoin index on October 31, 2021.
The index includes the six largest memecoins in the market, with Dogecoin (DOGE) having the largest allocation at 30.7%, followed by Shiba Inu (SHIB) at 28.3%, Pepe (PEPE) at 14.5%, Dogwifhat (WIF) at 12.5%, Floki Inu (FLOKI) at 7.14%, and Bonk (BONK) at 6.7%.
The allure of memecoins lies in their “high risk, high return” nature, making them attractive to investors with a speculative mindset. This strategy is expected to keep the top coins relevant, as stated by Anndy Lian, an intergovernmental blockchain expert and author of the book “NFT: From Zero to Hero.”
Analyzing the individual components of the memecoin fund, Pepe has shown the highest gains so far this year, with a rise of 482%. Floki follows closely behind with a 372% increase, while Shiba Inu takes the third spot with a growth of 112%. Bonk has performed the worst among the memecoins, but still outperformed the S&P 500 with a gain of over 59%.
Memecoins often deliver exponential returns, surpassing even some of the top cryptocurrencies. In comparison to the memecoin index’s impressive appreciation of 137%, the market caps of the top altcoins (excluding the top 10 cryptocurrencies) have only risen by 24% year-to-date.
However, despite the overall profitable returns, the six largest memecoins experienced a sell-off this week, raising concerns about a potential end to the memecoin season. Dogwifhat saw the largest decline, falling over 15%, while Pepe experienced a smaller decline of over 5%.
The price action of memecoins is difficult to predict for traders and technical analysts due to the absence of underlying utility. Their value is primarily driven by social media hype cycles specific to each memecoin. Trading volume is often used as an indicator of sentiment around memecoins, and it has been declining since early March across all blockchains.
In related news, a trader suffered significant losses due to the 0L Network hard fork.