A recent Bloomberg News article brought attention to a burgeoning development in the hedge fund sector: an escalating fascination with memecoins. The article noted that the unique appeal of these highly unpredictable digital currencies has become too enticing to resist for certain hedge funds, as they aim to reap significant profits through their speculative nature.
According to Bloomberg’s report, Stratos is mentioned as an illustration of a liquid fund that invested in Dogecoin, a meme cryptocurrency, which saw its price surge over 300-fold at one instance. The investors in this fund, believed to be venture capitalists Marc Andreessen and Chris Dixon, reportedly achieved a remarkable return of 137% during the first quarter, surpassing the performance of the broader crypto market.
An anonymous source reveals that Brevan Howard has made a small investment in the memcoin market, as mentioned in the article. Furthermore, Pantera Capital has expressed their belief that memcoins will persist and that trading in this sector presents significant possibilities.
According to Bloomberg’s latest update, meme coins are experiencing record-breaking trading activity on decentralized platforms, amounting to over $54.7 billion in total value.
Many people involved in cryptocurrencies are still hesitant about memecoins, despite increasing attention from hedge funds, the Bloomberg article notes. Memecoins differ from traditional cryptocurrencies as they’re not linked to particular projects and frequently originate from internet memes, characters, or trends. According to the piece, Quinn Thompson, founder of Lekker Capital hedge fund, likens the memecoin craze to the GameStop and meme stock mania in traditional markets, viewing it as a “speculative peak” and a form of “gambling.”
The Bloomberg article additionally reveals the development of memecoins, as per Portfolio Manager Cosmo Jiang at Pantera. He points out that these coins have transcended their comedic origins. People now refer to some memecoins as “culture coins,” representing entry into a cultural community or a collective set of beliefs.
The article goes on to mention that the foundations supporting memecoins have grown stronger since the previous cryptocurrency trend. Liquidity has enhanced, and complex futures markets have emerged on established exchanges. As a result, hedge funds can now profit from memecoins’ volatile swings and safeguard their investments, as Josh de Vos, research head at CCData, explains.
With hedge funds growing more accustomed to memecoins, Stratos’ Palley anticipates a heightened emphasis on these volatile tokens. According to a Bloomberg article, he even predicts the emergence of meme-dedicated investment funds, similar to those established for NFTs.
Last month, Franklin Templeton, a renowned American investment firm, brought up meme coins in an investor update. Despite having no real worth or function, these cryptocurrencies might generate significant profits for investors in a short time frame.
Franklin Templeton has gone full degen.
— The Wolf Of All Streets (@scottmelker) March 13, 2024
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2024-04-24 17:06