The meme coin frenzy may have cooled off a bit as bitcoin has lost some upward momentum. However, markets for top meme tokens are still more liquid than they were earlier this year, indicating that these supposedly non-serious cryptocurrencies, often criticized for lacking utility, are here to stay.
According to Kaiko Research, meme tokens have been resilient during the recent market correction, continuing to perform strongly despite historically being underperformers during downturns. Year-to-date (YTD) returns for these tokens range from 80% to 1800%, with trade volumes remaining strong.
Kaiko Research reports that the weekly trade volume for meme tokens surged by more than 200% YTD, reaching around $11 billion. This can be attributed to the tokens' accessibility and their ability to adapt to market trends, which has attracted community interest.
"Meme tokens have shown an unexpected resilience in the face of market corrections, maintaining strong trade volumes and performance," said an analyst from Kaiko Research. "Their popularity is largely driven by their accessibility and the strong community interest they generate."
However, meme coins tend to have higher leverage compared to most altcoins and are thus more influenced by speculative appetite.
Interestingly, the correlation between meme tokens and other retail-driven speculative assets, such as meme stocks, has been relatively weak and highly volatile. For instance, the 60-day rolling correlation between the largest meme token, Dogecoin (DOGE), and the video game retailer GameStop (NYSE:GME) has mostly remained below 0.3 over the past year.
Over the past week, meme stocks received an unexpected boost, with GME and AMC Entertainment (NYSE:AMC) seeing a surge on May 13-14. This caused the correlation between DOGE and GME to reach its highest level in over a year.
"Meme stocks saw a notable uptick last week, which also affected the correlation between Dogecoin and GameStop," Kaiko Research added. "This spike in correlation highlights the interconnected nature of retail-driven speculative assets."