- Memecoin market cap has increased over 27% in the past 24 hours, significantly outperforming the wider crypto market’s 5% growth. Major memecoins like Dogecoin, Bonk, and Shiba Inu saw gains of 33-54%.
- Growing risk-on sentiment among investors is contributing to the memecoin rally, as capital flows to more speculative assets when the crypto market gets more risk-on.
- Venture capitalists are increasingly interested in memecoins like Floki, with VCs like DWF Labs planning to purchase millions in Floki tokens. This VC investment is fueling speculation around similar memecoin projects.
The memecoin market has seen significant growth in the last day, vastly outperforming the wider crypto market. This rally appears driven by increased risk appetite among investors and growing VC interest.
Memecoin Market Outperforms Crypto Market
The memecoin market cap has increased by over 27% in the past 24 hours, significantly outperforming the rest of the cryptocurrency market which posted an uptick of just over 5% in the same period.
According to CoinGecko data, the market cap of memecoins currently stands at $347 billion. In the past 24 hours, major memecoins like Dogecoin, Bonk, and Shiba Inu increased 33%, 54%, and 27% respectively. Meanwhile, major cryptocurrencies like Bitcoin increased by around 3% during that time.
Bitcoin’s dominance of the entire crypto market now stands at 50.6%, while Ethereum’s dominance is at 17.1%.
Risk-On Sentiment Driving Memecoin Growth
Nansen data journalist Martin Lee said a growing risk-on sentiment is contributing to the recent memecoin market rally. As the crypto market gets more risk-on, capital will start to flow towards more speculative tokens, and memecoins are at the top of that list.
NFTGators Markets Analyst Nicholas Kitonyi concurred, stating that February’s wider cryptocurrency market uptick is attracting more risk-on speculators. For retail traders willing to gamble on small investments for potentially huge returns, memecoins provide just that.
VCs Increasingly Interested in Memecoins
Venture capitalists are increasing interested in memecoins, including Floki, a coin named for Elon Musk’s Shiba Inu dog.
According to Unizen Head of Research Ajav Dhingra, some of the recent memecoin rally is being driven primarily by VCs like DWF Labs. DWF Labs recently stated they plan to purchase $10 million in Floki tokens.
This kind of VC investment is fueling speculation that other similar projects will also benefit from the hype. In the past week, Floki has increased in value by over 70%.
Conclusion
The memecoin market continues to see significant growth, vastly outperforming the wider cryptocurrency market in the last 24 hours. This appears driven by a risk-on sentiment among investors and growing VC interest in projects like Floki. It remains to be seen whether this growth is sustainable long-term.
