The dominance of memecoins in the altcoin market has dropped big time since April, but their liquidity has seen nice gains.
Funny jokes bruh!
Data from CryptoQuant shows a slow, but steady decline in memecoin dominance. Ki Young Ju, the company’s CEO noted on X, the drop from September 2022 to May 2024 is pretty huge.
The dominance peaked in November 2022 at around 0.075 but fell to about 0.045 by early 2023.
The ratio varied slightly in 2023 but almost always in downward, averaging 0.04 by early 2024.
Another bigger decline happened from March 2024, with the dominance ratio dropping below 0.03 by May. Nature is healing, as they say.
Crazy gains
Despite the decline in dominance, memecoin liquidity has surged. Tokens like WIF, MEME, or BOME have seen growth ranging from 200% to the crazy 4000%.
The average price jump of memecoins in Q1 2024 was 1,313%, far outperforming the nearly 300% growth in the other trendy niche, the tokenized real-world assets sector.
The newest corrections in memecoin prices have led to drastic sell-offs, and the overall cryptocurrency market followed this trend, with market capitalization dropping below $2.4 trillion.
The memecoin market cap also fell to $49.9 billion from highs above $68 billion earlier this year.
Of course, we had some fun, 2024 already saw memorable events like the Solana memecoin frenzy, likely driven by the approval of Bitcoin spot ETFs and increased institutional interest.
Breaking the cycle
Well-known crypto analyst, using the pseudonym Altcoin Sherpa shared his thoughts on X about the ongoing memecoin cycle.
He reflected on the historical patterns of memecoins like DOGE, which have seen explosive growth followed by epic crashes, only to repeat the cycle again, and again.
In the past, the market cycled through major coins, mid-caps, and then memes, often signaling the end of a cycle.
But in 2024, this pattern changed. Memecoins have become the leading sector in crypto, overshadowing even strong tech projects.
Sherpa believes that while memes will always have a place in the market, with at least one memecoin consistently showing significant gains, they are small part of the market.
Still, the entire memecoin sector has outperformed other sectors for longer periods in 2024. Which is a joke on its own, but here we are.
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