Interest in memecoins is fading as liquidity returns to more functional digital assets, such as DeFi tokens, gaming platforms, and NFTs, according to a new report by investment firm Bernstein.
Previously, memecoins surged due to strict regulations on utility tokens and NFTs under former SEC Chair Gary Gensler. However, the landscape is changing with Donald Trump’s administration proposing Paul Atkins as the new SEC chair and forming a crypto task force led by Hester Peirce, known for her industry support.
Early signs of regulatory shifts include the SEC dropping its investigation into OpenSea and reaching a settlement with Coinbase.
Memecoins Lose Trust After Scandals
Bernstein analyst Gautam Chhugani highlights that the memecoin market thrived on speculative tokens linked to politicians and celebrities. A key example was LIBRA, a memecoin promoted by Argentine President Javier Milei.
LIBRA faced insider trading allegations, shaking market confidence and causing a sharp decline in Solana-based memecoin activity.
Castle Island Ventures partner Nic Carter also pointed to LIBRA’s collapse as the tipping point for memecoins, stating on X that the niche has “deflated completely.” He noted that memecoins were initially seen as a transparent alternative to venture investments but have increasingly favored insiders over retail investors.
Focus Shifts to Bitcoin and Tokenization of Real-World Assets
As memecoins lose appeal, attention is shifting toward Bitcoin and tokenized real-world assets. Bernstein analysts suggest the Trump administration is considering a strategic Bitcoin reserve, while institutional inflows into BTC ETFs continue, with a price target of $200,000 by year-end.
Stablecoins and tokenized securities are also expected to gain traction, offering new opportunities for B2B payments, interbank settlements, and cross-border transactions.
“When digital asset regulations become clearer, companies will be able to raise capital through tokenized stocks and bonds,” Bernstein’s report states.
Analysts predict that increasing stablecoin demand will boost crypto platform revenues, with tokenized assets driving trading volumes. Robinhood is seen as a key beneficiary, expected to integrate Bitstamp and expand its staking, stablecoin, and derivatives offerings over the next two years.
NFT Market Faces Continued Decline
Despite the shift away from memecoins, the NFT market remains under pressure. According to CryptoSlam, February sales volume dropped to $119.5 million, with buyers decreasing by 85.86% and sellers by 83.01%.
Ethereum-based NFTs saw the biggest losses, with market share falling 38.4% and sales totaling $62.71 million. Bitcoin NFTs declined even further, down 71.3% to $6.78 million.
Polygon was the only blockchain showing NFT growth, with sales increasing by 10.98% to $8.13 million. Mythos (+4.66%) and Base (+61.5%) also recorded gains.
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