Institutional investors on crypto exchange Bybit increased meme coin allocations to a high of $300 million in April from $63 million at the start of the year.

The surge in institutional allocations to meme coins, reaching nearly $300 million in April, reflects a significant shift in professional investors' attitudes toward this sector. According to Bybit, this influx underscores the growing interest among institutional investors in meme coins, with popular choices including dogecoin (DOGE) and shiba inu (SHIB) due to their substantial liquidity in the spot market.

Among the newer meme coins, Solana-based token BONK emerged as a favored option, attracting over $75 million in institutional investments. This trend highlights the increasing diversity and innovation within the meme coin space, as new projects gain traction and capture the attention of institutional investors.

However, despite the initial surge in allocations, institutional holdings in meme coins decreased by almost half to $125 million in May as investors took profits. This volatility underscores the speculative nature of meme coins and the importance of careful risk management in such investments.

Meanwhile, stablecoin holdings also saw a decline during the period, while exposure to bitcoin (BTC), ether (ETH), and meme coins increased. This diversification suggests a cautious approach among institutional investors, balancing higher-risk meme coin investments with more established assets like BTC and ETH.

Interestingly, dogecoin (DOGE) emerged as the leading choice among both retail and institutional investors, with institutions allocating a larger proportion of funds to DOGE compared to retail investors. This preference may be attributed to DOGE's higher liquidity and perceived stability within the meme coin space.

Overall, the rise of meme tokens within the Ethereum and Solana ecosystems reflects a broader trend of experimentation and innovation in the cryptocurrency market. As investors continue to explore new opportunities, meme coins are likely to remain a dynamic and evolving aspect of the crypto landscape.