ARK Investment Management founder and CEO Cathie Wood believes that most memecoins flooding the $2.73 trillion cryptocurrency market will eventually become worthless. In an interview with Bloomberg Television, she stated that her private funds do not invest in these assets.
According to Wood, the combination of blockchain and artificial intelligence (AI) has led to the creation of "millions" of memecoins, but most of them "won’t be worth very much."
Memecoins Remain Unregulated
In February, the U.S. Securities and Exchange Commission (SEC) stated that it does not consider memecoins to be securities, meaning they will remain unregulated.
"I have one message for those buying memecoins: be careful. Only after losing money will people realize that the SEC and regulators are not responsible for these assets," Wood warned.
The Future of Memecoins: Collectible Tokens
Despite her skepticism, Wood acknowledges that some memecoins may "stand the test of time." She cited an example of a memecoin launched ahead of Donald Trump’s inauguration, which initially attracted billions of dollars in trading volume but later experienced a sharp decline in price.
In Wood’s opinion, memecoins will eventually evolve into "digital collectibles." Previously, David Sacks, President Biden’s crypto advisor (also known as the "Crypto Czar"), proposed classifying NFTs and memecoins as "collectible assets." He believes that this classification could shift perceptions of these assets, emphasizing their cultural and commemorative value rather than viewing them solely as speculative instruments.
"NFTs and memecoins are like baseball cards or postage stamps. People buy them to immortalize something," Sacks stated.
He also emphasized that this is his personal opinion and not an official regulatory position.
Betting on Leading Crypto Assets
Wood remains optimistic about Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). She stated that the use cases for these assets are "expanding" and that they will play an important role in the future.
The investor has repeatedly predicted that Bitcoin could exceed $1 million by 2030. However, at present, the largest cryptocurrency is trading below $84,000, having lost about 13% since the start of the year.
Earlier, CryptoQuant CEO Ki Young Ju suggested that the bull market for BTC may have ended, forecasting a 6 to 12-month period of either bearish or sideways market movement.
Million-Dollar Losses as Interest in PolitiFi Tokens Declines
Meanwhile, crypto whales are exiting political memecoins like TRUMP and MELANIA, locking in significant losses. According to Spotonchain, by the end of February, just two of the largest transactions resulted in a combined loss of $40.4 million in just one month.
Not long ago, these political-themed tokens gained traction due to their association with election campaigns, but their value has now plummeted. Investors doubt their ability to recover, leading to further capital outflows.
Additionally, a new report from Bernstein suggests that the market’s interest is waning not only in political tokens but in memecoins in general. Analysts highlight that the rise of "useless" memecoins was largely driven by strict regulations on utility tokens and NFTs under SEC Chairman Gary Gensler.
Now that the market is adapting, investors are shifting their focus to assets with real utility, such as DeFi tokens, gaming platforms, and NFTs. This could result in a significant capital rotation from memecoins into the DeFi and Web3 sectors.
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.