A new report by crypto exchange Bybit shows that meme coins are becoming significant components of crypto portfolios. Institutional meme coin holdings surged 226% from February to March while retail meme coin holdings spiked 478% from February to April. However, they “aggressively sold off” their meme coins when market sentiment soured.
‘We Saw a Large Jump in Institutional Memecoin Allocations From February to March’
A new report by crypto exchange Bybit, titled “Beyond the Hype: The Realities of Institutional Memecoin Investments,” highlights the growing interest in meme coins among institutional and retail investors. The report covers data from January 1 to May 1, indicating that meme coins are increasingly becoming a substantial component of crypto portfolios.
“Institutional investors were willing to jump on the memecoin bandwagon as the trend peaked at the end of March,” Bybit described, adding:
Indeed, we saw a large jump in institutional memecoin allocations from February to March, increasing their spot holdings 226% to $204M. They increased still more in April, bringing their total memecoin holdings at that time to $293.7M.
However, the report notes that institutional investors then “aggressively sold off half their memecoins as market sentiment soured, ending the period with a $139M allocation — which is 125% higher than the start of the year, indicating an expectation for extreme risk-taking to return.”
As for retail investors, the report details:
Retail memecoin holdings increased drastically as the memecoin mania peaked in early April, rising 478% from February to April. This cohort then sold off their memecoin allocations, reducing them from $567M to $371M.
The report also explains that a snapshot of user holdings on May 1 shows that dogecoin (DOGE) continues to be the top choice for both retail and institutional investors. Institutions allocate 36.17% of their meme coin holdings to DOGE, while retail investors allocate 24.58%. Both groups also favor Ethereum-based meme coins, 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.
The report further underscores a significant difference in investment strategies. Retail investors allocate a larger portion (4%) of their portfolios to meme coins compared to institutions (2.5%). Nonetheless, both groups primarily invest in established meme coins with a longer track record. The report notes:
DOGE has certainly found its way into the long-term HODL stacks of both cohorts, reflecting its iconic status and strong performance over time. BONK was noticed by institutions and our snapshot on May 1 shows this cohort holds a 10% allocation compared to other memecoins.
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.
