SINGAPORE – Joe McCann, the founder of digital asset investment firm Asymmetric Financial, today revealed that the company was one of the first institutional funds to invest in memecoins, putting funds into Solana-based memecoin BONK in October 2023, when the token’s market capitalization had risen rapidly to $28 million. 

“There were a lot of reasons why we made that investment, but at a kind of core level, my job as a hedge fund manager is to make my investors money, and they actually don’t give a shit what I’m trading – they just want to see returns,” McCann said during a fireside chat with DeFiance Capital founder Arthur Cheong at the Solana Breakpoint conference. 

Many venture capital firms online have talked about why memecoins are terrible, he said. “[But] look at their bags. If they’ve invested billions of dollars in a dozen different layer 2s on Ethereum… memecoins are outperforming them.”

Read more: BONK Overtakes Dogwifhat as Top Solana Memecoin by Market Cap

BONK started the first day of October 2023 with a market cap of $9.2 million that soared in the days that followed. It has since grown its market cap to nearly $1.3 billion, substantially outpacing the governance tokens on Ethereum level 2 networks. 

During the same period, Arbitrum has gone from a market cap of around $1.2 billion to some $2 billion, a 70% jump, while Optimism has remained stable at just under $2 billion. 

BONK’s market cap has correlated with sharp increases in its price, unlike ARB and OP. 

Since Oct. 1, 2023, the price of an ARB token has dropped from 90 cents to roughly 57 cents at press time, while OP is up a relatively modest 24.6% from $1.34 to $1.67, according to CoinGecko data.

Read more: 2 Professional Crypto Investors Made Huge Gains on Memecoins: Here’s How They Did It 

“You’re foolish if you don’t have some exposure to [memecoins] in the portfolio, because the asymmetry on the upside of these positions is enormous,” McCann said. “Look at the last cycle – Dogecoin was crazy outperforming so many of these thesis-driven VC investments.” 

Despite his positive outlook on memecoins, McCann said 99.9% of memecoins are just a “flash in the pan,” hardly making them ideal for venture fund investors, in contrast to those with liquid portfolios. 

He also said there is no difference between buying a memecoin and hoping it jumps 1,000x and buying a lottery ticket and hoping your luck is in.

“That’s why 99.9% of memecoin traders on Pump.Fun have not made money,” he said.

CORRECTION (Sept. 22 00:20 a.m. ET): A previous version of this story incorrectly identified Asymmetric Financial as Asymmetric Capital. This error has been rectified.