TradFi Hedge Funds Eyeing Memecoins As Subsector Evolves Into ‘Culture Coins’: Report

Hedge funds are beginning to succumb to the lure of crypto memecoins searching for greater beneficial properties, based on a report from Bloomberg.

Newport Seashore, California-based fund Stratos – backed by heavyweight traders Marc Andreessen and Chris Dixon – reportedly recorded 137% beneficial properties in Q1 by allocating a part of its portfolio to dogwifhat (WIF), which is now the most important memecoin on Solana (SOL).

Says Stratos’ founding accomplice Rennick Pallet,

“The unspoken truth is that if the fund isn’t doing it, the people working at the fund are doing it.”

Whereas memecoins basically began as a joke – maybe with the launch of Dogecoin (DOGE) in 2013 –the investor says that extra hedge funds will inevitably begin taking the sector extra significantly as they turn into extra comfy with digital belongings usually.

“People will become more comfortable with the concept over time, not dissimilar to how people became comfortable with crypto overall… I wouldn’t be surprised with firms creating meme-only funds, just as they created NFT-only funds.”

Cosmo Jiang, a portfolio supervisor at crypto hedge fund Pantera Capital, describes memecoins as “culture coins” that present a form of unofficial membership into a bunch or motion.

“Meme coins initially started as clearly a joke. But over time they’ve evolved as much more than that. People have started to call some memecoins as culture coins, they are a membership into a culture or a group of people with a shared belief system.”

Josh de Vos, analysis lead at researcher CCData, notes that liquidity and infrastructure within the memecoin sector is quickly evolving, permitting corporations from the standard finance world who’re extra delicate to low liquidity to get entangled.

“Since the last cycle, the infrastructure surrounding memecoins has become more robust, with significant improvements in liquidity for several tokens… Centralized exchanges have developed sophisticated futures markets for leading memecoins, enabling hedge funds to capitalize on their volatile movements and effectively hedge their exposure.”

At time of writing, DOGE stays the most important memecoin with a $22 billion market cap, however faces competitors from Shiba Inu (SHIB) at $15 billion and WIF at $3.2 billion.

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