In recent times, memecoins have been gaining popularity as high-risk, high-reward investments, with potential to serve as hedges against market downturns. The recent drop in Bitcoin’s market capitalization by over $90 billion since 2 April has had a ripple effect on memecoins, causing a total loss of $5.88 billion. TRUMP, one of the well-known memecoins, reached an all-time low of $7 amidst this market turmoil.
Despite the overall market decline, there are some new tokens that are bucking the trend and experiencing significant growth fueled by hype and social buzz. These breakout memecoins may be emerging as a hedge against the broader market instability. Among the high-cap memecoins, Fartcoin (FARTCOIN) has been a standout performer with a remarkable 134.41% monthly gain, followed by CHEEMS with a 72% rally. Even though Fartcoin is still 77% below its all-time high, it has shown resilience and strong accumulation phases on its 1D price chart.
On 06 April, as Bitcoin dipped below its $80k support level and dropped to a five-month low of $75k, Fartcoin defied the trend and surged by 24.45% the next day. In contrast, Dogecoin (DOGE), the largest memecoin by market cap, only saw a 0.21% uptick, underperforming its mid-cap counterpart. This underwhelming performance extends to other high-cap memecoins, indicating a potential liquidity shift towards smaller, high-growth tokens in the market.
The volatility of memecoins is often seen as an attractive feature for investors looking to manage risk and potentially yield high returns during market downturns. While Bitcoin experienced a significant loss in market capitalization, the memecoin sector saw a relatively minor dip of $5.88 billion, showcasing its resilience. This trend aligns with the idea that capital is moving into newer, high-growth assets rather than staying stagnant in traditional holdings, as suggested by AMBCrypto.
Data from LunarCrush reflects a surge in engagement around select memecoins, with Fartcoin dominating multiple timeframes and experiencing a notable increase in trading volume to $370.03 million. This shift in capital towards emerging, high-growth assets suggests that newer memecoins are increasingly becoming the preferred hedge during periods of market volatility. Keeping a close watch on this trend could help identify potential opportunities for significant gains in the future.
