The memecoin craze that dominated 2024’s crypto market is losing steam, with Bitwise CIO Matt Hougan predicting its collapse within the next six months. Once capturing nearly 31% of global investor interest, memecoins are now facing a wave of skepticism after a series of pump-and-dump scandals and security breaches rocked the industry.
The Beginning of the End for Memecoins?
Hougan, in a Feb. 25 post on X, pointed to key events that signaled the downfall of memecoins—most notably, the controversial launches of MELANIA and LIBRA tokens and the Lazarus Group’s massive $1.5 billion Bybit exploit.
He remains optimistic about the broader crypto space, suggesting that institutional Bitcoin adoption, stablecoins, tokenization, and a DeFi resurgence could take center stage. However, he cautioned that these developments need time to gain momentum, and until then, the market may struggle to find the same level of excitement that memecoins once provided.
Investor Sentiment Sours After High-Profile Scams
The past two months have been brutal for memecoin investors, with confidence eroding rapidly.
MELANIA, a token that initially captivated the market, quickly became a cautionary tale. Investors were outraged after learning that 88% of its total supply was allocated to insiders. The token skyrocketed to a $1.9 billion valuation after its Jan. 20 launch, only to collapse by 93%, leaving bag holders in the dust.
LIBRA turned out to be an even bigger disaster. According to a Feb. 19 Nansen report, traders lost a staggering $251 million due to its implosion. And if that wasn’t enough, new revelations suggest that the notorious Lazarus Group used the Solana-based memecoin launchpad Pump.fun to launder stolen funds, further eroding trust in the sector.
The Regulatory Fallout: A Crackdown on Crypto?
Memecoins have long been viewed as speculative, but their ties to illicit activities could invite greater scrutiny from regulators.
Ben Kurland, CEO of crypto research platform DYOR.com, warned that memecoins being linked to financial crime gives regulators the perfect excuse to tighten oversight—not just over meme tokens but over the broader crypto market.
“The risk is overreach—regulators could use bad actors as justification to clamp down on broader innovation instead of focusing on targeted enforcement,” Kurland explained.
This concern is echoed by industry leaders who fear that authorities may leverage the recent scandals as a gateway to impose stricter regulations, potentially stifling crypto’s next wave of innovation.
What Comes Next?
As memecoins fade, what will fill the void?
According to Hougan, crypto’s next phase will likely be driven by:
- Institutional Bitcoin adoption – Major financial firms are increasingly embracing Bitcoin as a legitimate asset class.
- Stablecoins – With growing regulatory clarity, stablecoins could become a cornerstone of the digital economy.
- Tokenization – Real-world assets, from real estate to stocks, are being tokenized on blockchain networks.
- DeFi resurgence – Decentralized finance is making a comeback, with new projects focusing on security and usability.
But while these trends have the potential to redefine crypto, they may not generate the same level of hype that memecoins did. Without the speculative frenzy that memecoins fueled, retail participation could cool off, at least in the short term.
For now, the crypto industry faces a period of transition—one that could bring both new opportunities and fresh challenges.
