Love them or hate them, memecoins are winning either way

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. Subscribe to the Empire newsletter.

Fri-yay!

It’s been a generally quiet week for crypto across the board, so we’re taking a look at a few different areas. David, for example, celebrated the end of the week with memecoins.

Oh, also, Yano gave some insight into what he’s watching — and one thing that could be either bullish or slightly concerning.

We’ll see you on Monday.

— Katherine Ross

Three commas for every coin

Say what you will about memecoins — they’ve clearly found product-market fit.

Back when the /r/wallstreetbets saga kicked off the first memecoin mania in 2021, it was mostly dog coins that were super hot: Dogecoin copy-cats like shiba inu, babydoge and floki, the latter of which was named after Elon Musk’s dog, a shiba inu.

At the time, hardly any memecoins were at the top end of the market. There were, as always, silly projects with outrageous valuations that weren’t explicitly memecoins — such as SafeMoon and Hex.

But out of the top 250 or so, pure-play memecoins were represented by that small handful of dog coins orbiting Musk’s then-newly found appreciation for Dogecoin.

Today, over 10% of the top-250 are memecoins, and they’re securing more billion-dollar market caps faster than ever.

Out of the memecoins that have launched during this cycle (which, let’s say, started in 2022), seven have reached the $1 billion mark at some point : BONK, BOME, WIF, BRETT, POPCAT, CORGIAI and PEPE.

*This chart plots market caps of dozens of memecoins, as if they were all launched at once*

On average, it took those seven memecoins about five months to reach three commas. BOME did it in four days, PEPE in 21 and WIF in 84.

A slew of smaller memecoins have also either recently hit all-time highs or are approaching new records as we speak, including MOG, TURBO, SPX6900, NEIRO, GIGACHAD and NPC.

One theory goes that memecoins are capturing so much interest simply because the SEC has sued the market into submission:

If a majority of the crypto market is considered investment contracts (regulated in the same way as securities), then why not trade the most pointless tokens instead?

Let’s say that’s true. Thanks a lot Gensler, you’ve made crypto more fun than ever!

— David Canellis

IYKYK

We caught up with Empire podcast host (and Blockworks co-founder!) Jason Yanowitz again this week to gauge his sentiment with the election just a few weeks away.

I’ll preface this now: There’s good, and then there are some potentially uncomfortable things headed our way. But I’ll leave you to pick and choose what you take away from our conversation.

“I think, even [at the] end of Q4, I genuinely think there’s a chance that bitcoin breaks all-time highs in November or December. You have, on a macro level … The dollar’s kind of turning over … Interest rates are going down,” Yanowitz explained to me.

He added that he doesn’t agree with people who think that a single presidential candidate is good or bad for the industry.

“Either way, Kamala [Harris] or [Donald] Trump … would be good for crypto. We just need a new administration, Democratic or Republican.”

He’s also wary of the amount of tokens coming down the pipeline.

“Everyone’s trying to launch a token after the election and before Q1 ends. If they’re low-float, high-FDV tokens, that’s a bad thing and a lot of people are going to lose a lot of money,” Yano said. But, on the flip side, if they launch at “reasonable valuations,” then that could be bullish. It all depends on the structure, which we don’t know currently.

And now you know.

Earlier this week, Galaxy released its quarterly update on venture capital activity in crypto.

Some of the key takeaways: VCs invested $2.4 billion last quarter, a 20% decrease quarter-over-quarter. 2024 is now set up to just barely exceed 2023.

If you’ve been a loyal Empire reader, that last stat might not be too shocking, given our numerous conversations with PitchBook’s Robert Le about funding activity.

Le’s been pretty vocal about when we could see activity pick up (spoiler alert — it’s not this year).

But the stat I wanted to hone in on is that last quarter actually saw a huge slice of the VC pie head to early-stage crypto projects. 85%, to be precise, leaving only 15% invested in later-stage companies.

While VCs are still piling in, it looks like it’ll be some time before we see those types of projects hit the broader market.

The good news, for us at least, is that it’s possible to track dealflow and keep an eye on how VC activity is impacting crypto. Kind of fun, right?

— Katherine Ross

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.