The Hedge Funder Who Trades Meme Coins

Joe McCann started his career in the early 2000s as a proprietary equities trader before leaving Wall Street to work as an executive in the software industry.

As hedge funds continue to explore the world of cryptocurrencies, a new frontier has emerged at the intersection of Wall Street and Meme Street. Joe McCann, the founder of a hedge fund that trades meme coins, has found himself at this unique juncture.

McCann, who began his career in the early 2000s as a proprietary equities trader, left Wall Street to work as an executive in the software industry while continuing to trade equities and options on the side. In a recent interview with Business Insider, he laughed at the thought of returning to the industry professionally.

"I'm covered in tattoos," McCann said. "I don't look like a traditional hedge fund manager at all. I was propositioned to start my own fund by a very successful VC who preemptively pitched me to Marc Andreessen and Chris Dixon to be the first money into a fund I hadn't even created yet."

He eventually launched Asymmetric in 2022, and by 2024, he had more than one fund trading crypto, including meme coins. McCann's original flagship fund, the Technology Master Fund, ranked in third place for a 12-month cumulative return from 2,280 funds globally in March 2024, according to Preqin.

Trading on Meme Street

Hedge funds use various strategies and instruments to buy, short, and deploy leverage to increase the chances of higher gains while accepting heightened volatility. But sitting at the intersection of Wall Street and Meme Street is perhaps a new frontier for peak risk exposure.

"I'm literally sitting on the deck of my condo in Miami right now," said McCann, adding that he has an office but doesn't often go there. He told Business Insider he had just finished rolling over options contracts on solana using Telegram from his laptop, which was followed by a trade confirmation through email.

McCann's approach has been to find the middle ground between embracing digital assets and employing traditional strategies and tools Wall Street firms use to mitigate the risk of ruin, one of which is an internally built software that tracks his firm's risk exposure across positions with multiple sign-offs before moving money.

"I'll just be super clear. I've been trading for so long that eventually, your skill as a trader is to be as unemotional as possible," McCann said. "And if you get caught up in the euphoria or even the depression when markets are going down, you're going to make poor trading decisions."

For McCann, all cryptos, at least at some point, were meme coins, including bitcoin, which he refers to as the original one because it, too, was built around internet hype. Meme coins are now popularly known as digital assets that reflect internet memes, culture, or topically relevant events. Their attractiveness comes from the potential to reap upward of 1,000% returns in short periods of time — a bet that matches a gamble. But the biggest challenge to trading them on an institutional level is a lack of liquidity, which makes large positions difficult to move, especially if you need to exit fast.

For McCann's funds, this means staying away from relatively newer tokens. At the same time, relatively larger positions are reserved for "blue-chip meme coins," which he defines as those that have sustained billion-dollar market caps for at least 90 days. He also limits exposure to 2% of the fund's assets under management for tokens that aren't in the top 20% of crypto's market cap. Once those basic guardrails are in place, he approaches the asset class like any other, using data and technical analysis to determine what might pop off next.

In 2023, he observed stablecoin flows moving from Ethereum to Solana. Meanwhile, SOL's price had hovered below $30 for most of 2023. He assumed that if new inflows pushed its price above a key resistance point, it would suddenly attract more market participants, including momentum traders and algorithms that would carry the price even higher.

"When you move stable coins over to another protocol or blockchain, you don't just leave it in USDC, you buy something, and typically you end up buying the underlying asset, in this case, SOL," he said.

As SOL's price rose, it would follow that its holders would likely use some of those gains to buy high-beta or more volatile tokens for a steeper risk-to-reward outcome using the house's money. McCann used historical reasoning to guess which asset the higher-risk bet would be on Solana's blockchain. Since the original meme, dogecoin, an image of a shiba inu dog, was born from Bitcoin's blockchain and Ethereum had its copycat version called Shiba Inu coin, which rallied when ETH rose in value, he inferred that Solana's offshoot version would be bonk coin, which also uses a Shiba Inu image.

Indeed,