2024

Memecoin

Notable

Higher

In this ongoing struggling cryptocurrency landscape, the trading of popular meme coins has become quite easier these days due to a surge in liquidity, according to an on-chain analytics firm Kaiko. Kaiko in his recent report highlighted that the Liquidity (It is measured by 1% market depth) of overall meme coins hit an all-time high of $128 million which includes meme tokens like DOGE, SHIB, PEPE, WIF, BONK, GROK, BABYDOGE, FLOKI, MEME, and few others. What is Market depth? 
Market depth is a measure of the total value of buy and sell orders within 1% of the current market price. Higher market depth means it’s easier to execute large orders without causing notable price changes. This results in better pricing for traders and reduces the cost of executing trades. 
Despite a recent pullback, meme tokens continue to be among the best performers this year, outperforming 
Despite the surge in liquidity, meme coins are not seeing the expected tightening of bid-ask spreads. According to Kaiko, bid-ask spreads for these tokens remain above 2 basis points on most centralized exchanges (CEXs). This suggests that, although more market makers are providing liquidity for meme coins, they are still viewed as risky due to their high volatility. Notable growth in liquidity 
Kaiko’s recent report highlighted that the liquidity increase is partly due to a price surge. However, smaller meme tokens such as Dogwifhat (WIF), Memecoin (MEME), and Book of Meme (BOME) have also experienced notable growth in liquidity, ranging from 200% to a record 4000% in native units. 
The increase in liquidity is not just beneficial for individual traders. It also signifies a maturing market that can handle larger trades without significant price swings. This is crucial for institutional investors who are typically wary of assets with low liquidity. With meme coins becoming more liquid, they may start attracting more institutional interest, further stabilizing the market. 
Despite the positive trends, <a href="https://news.todayq.com/pepe-floki-gave-best-returns-in-bitcoin-bull-run-shows-data/">meme coins</a> still face significant challenges. Their high volatility makes them risky investments, and the fact that bid-ask spreads remain relatively wide indicates that market makers are cautious. 
Looking ahead, the continued growth in liquidity could lead to more stable trading conditions for meme coins. If market makers continue to enter this space and provide liquidity, we might see tighter bid-ask spreads and reduced trading costs. However, the inherent risks associated with these highly volatile assets mean that traders and investors should proceed with caution.

Here’s Why Meme Tokens are the top performers of 2024

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