Meme Coin Index Products: A New Tool to Navigate the Volatile Meme Coin Space

There’s no doubt that the meme coin niche has greatly benefited from the rising attention on crypto. Tokens in this category reflects the powers of memes

With the rising attention on crypto, the meme coin niche has undoubtedly benefited. Tokens in this category showcase the strength of memes in driving innovation, value, and community spirit.

During the recent Token2049 conference, well-known crypto billionaire and founder of Tron network Justin highlighted the importance of meme-related projects to the entire industry. In his words, “meme coins may seem conventional, but they reflect the power of community in crypto.”

It is no surprise that the meme coin space has gained heavy traction, boasting an overall market value of over $40 billion at press time. Popular meme coins like Dogecoin, Shiba Inu, Pepe, Bonk, Floki, Brett, and even new entrants like dogwifhat and Book of Meme have been at the forefront of the surging meme coin mania.

In recent months, some of these tokens even outperformed major cryptos on the market, thanks to their strong community-centric concepts. While all meme coins are highly volatile, they appeal to investors seeking short-term gains.

Emerging Tools for Meme Coins

Amid the growing excitement around meme coins, many tools are emerging to aid investors’ experience and protect them from the high risks associated with them. One of these tools is a basket index. Presenting itself as investors’ ticket to better meme coin trading, this tool works exactly the same as S&P500, allowing investors to trade their favorite meme coins in one go.

Rather than having direct exposure to each of the underlined meme coins, traders can speculate on the market potential of top tokens and make gains without directly holding them. Another major advantage of this innovative tool is that it helps investors track the performances of these tokens so they can discover the best entry and exit points.

MarketVector Index for Meme Coins

One of the top firms that are offering this product is MarketVector, a subsidiary of the renowned American investment manager VanEck. This move is enough indication that traditional asset management firms are now showing interest in what meme coins have to offer.

Known as the MEMECOIN Index, this unique tool covers the top 6 meme coins by market cap. At the time of writing, the top 6 meme coins include Dogecoin, Shiba Inu, Pepe, dogwifhat, Bonk and Floki. The constituents are regularly updated in line with market trends.

Since launch, the MEMECOIN Index has shown impressive performance, soaring by over 195% in the past year. More so, it is up by more than 137% since the beginning of the year. The MarketVector Index caters to institutional and retail investors. It uses a cap of 30% on individual coin weightings, thereby ensuring easy diversification and protection from the influence from individual assets.

While retail investors can leverage the tool to gauge the relative performance and market share of their favorite meme coin, institutional investors use it to discover structured entry point into a market characterized by volatility and speculation.

MEMEMEXTUSDT

Another major meme coin basket index available to investors is known as MEMEMEXTUSDT. Launched by BitMEX, a prominent crypto derivatives exchange, this perpetual swap contracts covers up to 10 meme coins, making it a good alternative to the one offered by MarketVector. The product, according to reports, is margined in USDT with up to 25x leverage. This simply means investors can trade the entire basket of underlying meme coins without exposure to individual assets.

BitMEX index product comes with a maker of -0.015% and a take fee of 0.075%. More so, it has a base initial margin requirement of 4.00% and a base maintenance margin of 2.00%.

Bottom Line

Meme coin index products serve as one of the most potent instruments to safeguard investors’ from the extreme volatility of meme coins. Since they come with good maker and taker fees, they offer investors the opportunity to maximize their investments. That said, for those seeking exposure to a basket of up to 10 meme coin assets, the BitMEX perpetual swap index comes highly recommended.