According to a report from Bloomberg, hedge funds are starting to succumb to the lure of cryptocurrency memecoins in search of bigger profits.
Newport Beach, California-based fund Stratos, with the backing of heavyweight investors Marc Andreessen and Chris Dixon, allocated a portion of its portfolio to dogwifhat (WIF), currently the largest memecoin on Solana (SOL), with 137 in the first quarter. It is known that a profit of % was recorded.
Rennick Pallet, founding partner at Stratos, said:
“The implicit truth is that the people working at the fund are doing things the fund is not doing.”
Although Memecoin essentially started as a joke (perhaps with the launch of Dogecoin (DOGE) in 2013), investors say they will inevitably start taking the sector more seriously as more hedge funds become more comfortable with digital assets in general. .
“People will become more familiar with this concept over time. It’s no different from the way people have become familiar with cryptocurrencies in general. I wouldn’t be surprised to see companies create funds dedicated to memes, just like they created funds dedicated to NFTs.”
Cosmo Jiang, portfolio manager at cryptocurrency hedge fund Pantera Capital, describes memecoins as “cultural coins” that provide a kind of unofficial membership to a specific group or movement.
“Meme coins clearly started out as a joke. But over time they evolved into more than that. People started calling some memecoins cultural coins. It is a member of a culture, or a group of people with a shared belief system.”
Josh de Vos, head of research at CCData Research Institute, points out that the memecoin sector’s liquidity and infrastructure are rapidly evolving, allowing companies in traditional finance, which are more sensitive to low liquidity, to participate.
“Since the last cycle, the infrastructure surrounding memecoin has become more robust and the liquidity of several tokens has significantly improved… The centralized exchange has developed a sophisticated futures market for leading memecoin, allowing hedge funds to take advantage of its volatile movements. Allows you to effectively hedge your exposure. ”
As of this writing, DOGE remains the largest memecoin with a market capitalization of $22 billion, but faces competition from Shiba Inu (SHIB) with $15 billion and WIF with $3.2 billion.
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