Interest in memecoins sharply declined after the high-profile LIBRA scandal, which was linked to Argentina's President Javier Milei. Investor and Castle Island Ventures partner Nic Carter believes this marked the final nail in the coffin for the sector.
In a post on X dated February 19, he stated that "memecoins are cooked," and the incident only confirmed the corruption in that part of the crypto market.
Carter explained that memecoins initially gained popularity as a seemingly honest alternative to overvalued venture projects (with high FDV). Previously, they were compared to a casino game, where at least users were confident that the rules were the same for everyone. However, recent high-profile launches revealed the opposite: insiders were obtaining significant advantages over ordinary investors.
"Casinos don't just take a small commission — they win in 90% of cases," Carter wrote, mentioning not only LIBRA but also memecoins associated with Donald Trump and other well-known figures (Harryp Bolz, Broccoli, and JENNER).
Memecoins as a Stress Test for the Financial System
Not everyone in the crypto industry agrees with this view. Backpack founder Armani Ferrante believes that memecoins have real value as a tool for testing future financial systems.
In an interview with Cointelegraph, he stated that cryptocurrency was originally created for processing transactions, but it is meaningless on its own if it isn’t tied to real goods and services.
"Memecoins are an experiment that tests the readiness of traditional financial systems for on-chain transformations," Ferrante noted.
He added that many technological breakthroughs began as something that looked like a toy. He doesn’t rule out that, in the future, memecoins could form the basis for more large-scale solutions that allow value transfer on the blockchain without intermediaries.
Support for Memecoins from Coinbase
Coinbase CEO Brian Armstrong also doesn’t dismiss memecoins. He compared them to the early days of the internet, when animated GIFs seemed useless but eventually became an integral part of digital culture.
"We need to remain open to new trends. Even if memecoins seem funny or even fraudulent today, they might become part of something bigger," Armstrong said.
In his view, memecoins demonstrate that the future of finance and digital assets is tied to tokenization and the transfer of value onto the blockchain.
Declining Popularity of Memecoins
Despite differing opinions, statistics show that interest in memecoins is indeed declining. According to Dune Analytics, the number of new tokens launched through the Solana platform Pump.fun dropped by 59% over the last month. While a record 71,700 tokens appeared on the platform on January 23, that number fell to 28,900 by February 19.
DeFi Instead of Memecoins
Amid the cooling memecoin market, analysts predict a new wave of popularity for decentralized finance (DeFi). Charles d’Haussy, CEO of the dYdX Foundation, stated that what is coming is not just a "DeFi Summer" like in 2020, but an entire "DeFi Festival" that could last much longer than a few months.
In his opinion, user trust will gradually return to established projects, and institutional investors will increasingly explore this sector. If this forecast proves correct, the market might see a new growth wave — focused on the real economy rather than speculative memecoin trading.
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This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.