In Cryptoland, memecoin fever is giving way to a stablecoin boom

When is the US president Donald Trump launched his own meme cryptocurrency On January 17, a few days before his return to the White House, I was halfway to the Swiss Alps, attending a crypto conference in the city of St. Moritz.

Memecoins, which typically have no purpose beyond financial speculation, were having a moment. Last year millions of new memecoins flooded the market; several, e.g Fartcoinskyrocketed to billions of dollars. Pump.Fun, a platform for launching and trading memecoins, was created one of the fastest growing cryptocurrency startup companies whenever. Now the future president has joined the action.

At lunch on the second day of the conference, under the ornate stucco ceiling and gold chandeliers in the dining room, I found a table dedicated to talking about memecoins. While other tables were half full, the memecoin workshop was oversubscribed; latecomers arranged their chairs, forming two full rows.

The discussion was moderated by Nagendra Bharatula, founder of the investment company G-20 Group. Bharatula recently co-author of the article arguing that memecoins, despite their youthful spirit, have a place in the portfolios of professional investors. He noted that in the six months earlier, a basket of 25 “bluechip memcoins” – an oxymoron if ever there was one – outperformed bitcoin by 150 percent. Some of the participants whispered in approval.

Since then, the memecoin market has lost its luster. The paper value of Trump’s coin, which peaked at $14 billion two days after its launch, has fallen to about that $1 billion. Hundreds of thousands of petite investors they lost their shirts. Pump.Fun’s daily revenue, reflecting the overall appetite for memecoin trading, is just over a tenth of what it was in January. The memecoin gold rush has sparked a number of lawsuits.

Next up: stablecoin. If memecoins symbolize reckless abandon and unwavering speculation in cryptoland, stablecoins symbolize the industry’s search for purpose and respect. Designed to maintain a fixed valuation of $1, stablecoins are pitched by proponents as a faster and cheaper way to make everyday payments and international money transfers.

In a year in which the United States announced it was open to crypto business, and previously crypto companies feared a harsh regulatory backlash under the Biden administration, stablecoins displaced memecoins in coin-à la mode – and broke into the mainstream.

Although stablecoins were approximately since 2014most of them were used by cryptocurrency traders as a safe and sound haven during periods of market volatility, rather than by ordinary people. The concept also met resistance from regulators skeptical of the modern form of money; Diem, the stablecoin venture incubated at Meta, is renowned closed in 2022 in the face of widespread opposition.