The memecoin frenzy in the digital asset market shows no signs of stopping, with trading volumes now at levels last seen just before the burst of the last crypto bubble more than two years ago.

Considered as some of the most speculative and volatile cryptocurrencies, memecoins such as dogwifhat and pepe are far outstripping the gains registered by market bellwether bitcoin that has dominated the headlines.

Trading volume for the top memecoins, which often trade for a fraction of a cent, reached nearly US$80-billion in the past week, according to data compiled by blockchain data firm Kaiko. That’s the highest since October 2021.

“Historically, a surge in meme tokens has often signalled a market top,” Dessislava Aubert, research analyst at Kaiko, said. “However, it is difficult to predict whether this will continue to be the case now as new capital is entering the crypto markets. We also observe that some of these tokens are increasingly driven by idiosyncratic factors and are less correlated with bitcoin.”

Pepe, a frog-themed coin, and dogwifhat — a dog pictured wearing a hat — continued racking up fresh highs in the past week, according to tracker CoinGecko. The total market value of the memecoin sector has reached more than $60-billion on Wednesday.

Memecoins have been a long-existing phenomenon in crypto, as small investors and promoters see the microscopic prices of memecoins as an opportunity to post huge returns quickly despite the lack of traditional fundamentals.

Meme rush

“It’s not a great reflection of the actual realisable price,” said Thomas Perfumo, head of strategy at Kraken Digital Asset Exchange. “So, for example, if you saw a memecoin that supposedly had a market capitalisation of $1-billion, it’s very unlikely that anyone would be able to sell anywhere close to $1-billion of it without materially impacting the price.”

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That’s not stopping fans of the tokens from trying to keep the momentum going. A group of dogwifhat token holders announced last week a public fundraising campaign to put the dogwifhat meme on the Las Vegas Sphere. The group has already reached its target goal of $650 000 in the USDC stablecoin, based on the transaction history of the digital wallet for the fundraise. But it’s unclear whether and when the fund will be used to promote the meme in Las Vegas. — Muyao Shen, (c) 2024 Bloomberg LP