- Recent scandals are bringing the demise of memecoins.
- Bitwise CIO Matt Hougan pointed to Melania, Libra, and Lazarus Group as the main causes of death.
- There’s still good reasons to stick around, he said.
Memecoins are in for a slow and painful death.
That’s according to crypto investment firm Bitwise chief investment officer, Matt Hougan, who said that recent scandals are bludgeoning memecoins to death.
“What crypto is digesting right now is the end of the memecoin boom,” wrote Hougan on X on Tuesday. “The combination of Melania, Libra, and the Lazarus Group using memecoins to launder stolen ETH will kill it dead.”
Memecoins — which took off last year thanks to popularity of memecoin platform pump.fun — have lately taken some grim turns.
Just last Friday, the North Korean hacker organisation Lazarus Group was attributed with the $1.5 billion ByBit hack that resulted in thousands in ETH being drained. In the days that followed, SolanaFloor reported that the group was using popular memecoin platform pump.fun to launder the stolen funds.
Days before the ByBit hack, Argentine president Javier Milei promoted a Solana-based token dubbed Libra that turned into digital assets company Galaxy described as a $4.6 billion “rug pull.” Local Argentines decried “hypocrisy” while Hayden Davis, the mastermind behind Libra and the Melania memecoin, exposed a web of insider trading.
Still, Hougan said there’s good news on its way.
Institutional adoption
The first on Hougan’s list of “things ready to replace” memecoins is traditional finance piling into Bitcoin.
What first began with Michael Saylor’s now-rebranded Strategy and their unique Bitcoin acquisition model has now expanded to Wall Street at large.
Led by BlackRock, ten other firms now offer Bitcoin exchange-traded funds, which have been wildly successful. They attracted more than $107 billion in their freshman year, marking the best debut in ETF history.
That trend is set to continue into 2025, with more than six new crypto ETF filings flooding the SEC. Litecoin holds the highest odds of approval.
Morgan Stanley CEO Ted Pick said his bank will work with regulators to offer crypto in a “safe way.” Several other top executives are similarly exploring crypto products.
Stablecoins
Hougan is bullish for stablecoins.
That’s because the $187 billion stablecoin sector has quickly become one of crypto’s killer use cases. These tokens, designed to maintain a stable value – usually pegged 1:1 with a fiat currency like the dollar – have been gaining traction.
“It’s going to be a new payment method,” Chris Colson, the Federal Reserve Bank of Atlanta’s payments guru previously told DL News.
Top traditional finance companies are also exploring stablecoins. Robinhood recently launched a stablecoin network with Kraken cryptocurrency exchange, and PayPal’s PYUSD is also live.
In fact, the top stablecoin, Tether’s USDT, processes the most amount of value in 24 hours by a wide margin. Users sent $151 billion worth of USDT – a number that exceeds its total market value – versus Bitcoin’s $98 billion in the last 24 hours, according to data from CoinGecko.
Tokenisation
Hougan also touted tokenisation — or putting traditional financial assets onto blockchain networks.
He’s joined by some big names. In 2022, BlackRock’s Larry Fink said that tokenisation is the future of financial markets, which the firm is already testing. The founder of Skybridge Capital, Anthony Scaramucci, is also banking on bringing assets on-chain — with bets that Solana will win out.
The tokenisation market is on course to grow to $14 trillion and $16 trillion by 2030, according to reports from New York-based consulting firm Oliver Wyman and the Boston Consulting Group.
DeFi
DeFi’s rebirth will also help replace memecoins, according to Hougan.
Even though decentralised finance has been somewhat underappreciated in the past two years, it remains a force to be reckoned with — and shows plenty of room for growth.
Some of the industry’s largest networks are DeFi-based, including Uniswap, Aave, Compound, along with Coinbase’s new layer-2 chain, Base. In 2024, what was once considered a pipedream, DeFi on Bitcoin took a big step forward, with the appearance of BTCFi.
Others reckon the move will be to integrate FinTech companies with DeFi this year.
“In 2025, we’ll see the long-awaited adoption of the ‘DeFi mullet’ — where fintech apps integrate DeFi protocols like Aave or Morpho directly for safer and better financial products,” Thomas Mattimore, CEO of ABC Labs, the team behind Reserve Protocol, previously told DL News.
Hougan tempered expectations regarding these four sectors, however.
“Until they start making their presence felt, the loss of energy will create a drag on the market.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.