Hedge funds seem to be embracing the usage of memecoins, especially with the ongoing price frenzy that the crypto niche is experiencing.
Dogwifhat Becomes Hedge Funds’s Goto Bet
Some experts claim to have discovered a growing trend of memecoin adoption and utilisation amongst some of the finest Hedge funds.
In December 2023, Solana-based Dogwifhat rose to become one of the best performing crypto. Almost immediately, Newport Beach, California-based Stratos released a liquid fund that held the token.
With time, the Dogwifhat memecoin recorded a surge of up to 200% and this helped the Stratos fund to post a 137% return in Q1.
In no distant time, more trading platforms including Robinhood and Binance announced their support for the token by listing it. Stratos, which is largely supported by venture capitalists Marc Andreessen and Chris Dixon, is not the only hedge fund that decided to take a slice of the memecoin jamboree.
According to a person who asked to remain anonymous, leading investment management firm Brevan Howard also plunged a little fund in the memecoin market a while back.
Also, Pantera Capital’s Liquid Token Fund bagged a significant return of 66% in Q1, 2024. Coingape reported that the success of the fund was primarily driven by investments that the fund made in cryptocurrencies like Solana (SOL), RBN, Aevo, and Stacks (STX).
Therefore, it was little wonder when the crypto fund stated that “memecoins are here to stay,” and that “memecoin trading creates gigantic” opportunities.
The Dwindling Confidence For Memecoins by Hedge Funds
This increased engagement with memecoins have contributed to high trading volumes that the niche is registering on decentralized exchanges. The overall market capitalization for memecoin is lurking around $54.7 billion.
Some investors believe that the rise in memecoin price is only a frenzy that would fade with time. “It’s the tip of the spear for speculation. It’s gambling,” Quinn Thompson, founder of the hedge fund Lekker Capital said.
While the Dogwifhat memecoin has seen better days in the past, it is currently down by over 40% from the all-time-high (ATH) that was recorded in March. At press time, Dogwifhat was trading at $3.0 with a 7.15% increase within the last 24 hours. Coins like SOL are still rallying with speculation that its price may hit a new ATH.
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from CoinGape