Hedge funds are increasingly being drawn to the appeal of crypto memecoins in pursuit of greater profits, as per a Bloomberg report. Stratos, a fund based in Newport Beach, California and backed by prominent investors Marc Andreessen and Chris Dixon, reportedly achieved gains of 137% in Q1 by including dogwifhat (WIF), which is currently the largest memecoin on Solana (SOL), in its portfolio. Rennick Pallet, the founding partner of Stratos, points out that if a fund is not participating, its employees most likely are. Although memecoins began as a joke, with the launch of Dogecoin (DOGE) in 2013, the investor anticipates that more hedge funds will inevitably take the sector more seriously as they grow more comfortable with digital assets in general. Pallet suggests that firms may even create meme-only funds, following the trend of NFT-only funds. Cosmo Jiang, a portfolio manager at crypto hedge fund Pantera Capital, describes memecoins as “culture coins” that offer an unofficial membership into a particular group or movement. He notes that memecoins have transitioned from being mere jokes to embodying a cultural identity or shared belief system. Josh de Vos, research lead at CCData, highlights the rapid evolution of liquidity and infrastructure in the memecoin sector, making it more accessible for traditional finance firms that are particularly cautious about low liquidity. De Vos explains that the infrastructure surrounding memecoins has improved significantly since the last cycle, with enhanced liquidity for several tokens and the development of sophisticated futures markets on centralized exchanges. This enables hedge funds to take advantage of the volatile movements of leading memecoins and effectively hedge their exposure. As of now, DOGE maintains its position as the largest memecoin with a market capitalization of $22 billion, but it faces competition from Shiba Inu (SHIB) at $15 billion and WIF at $3.2 billion.