Memecoins Lose Momentum as Crypto Industry Seeks a New Narrative

As memecoins lose popularity, Bitwise Chief Investment Officer Matt Hougan said, the cryptocurrency sector might require a new focal point. Hougan raised concerns about North Korean hacker outfit Lazarus utilizing memecoins to launder stolen assets in an interview with cryptocurrency influencer Scott Melker.

“That [Lazarus] attempted to launder the money was the killer piece there.” “The group’s attempt to transfer money from the Bybit hack through the memecoin platform pump.fun,” Hougan said. He thinks that because investors and regulatory agencies would probably have a less positive opinion of memecoins as a result of this episode, it is a turning moment for them.

Lazarus Group recently stole nearly $1.5 billion in Ethereum (ETH) and Lido Staked Ether (stETH) from Bybit. Their use of memecoins for laundering raises serious concerns about the credibility and security of the asset class.

The Search for a New Crypto Narrative

Hougan says the industry has to concentrate on other areas like stablecoins and decentralized finance (DeFi) since memecoins are becoming less popular. He says that throughout the last six months, memecoins have been a major factor in bringing excitement and money to the market. But recent incidents involving memecoins like MELANIA and LIBRA, as well as the Lazarus episode, have indicated that this trend is waning.

“Outside of Bitcoin, the only real story that was sort of present and easily felt over the last six months [and] was positive was the memecoin story,” Hougan explained. “It was injecting capital into the market, it was injecting energy into the market, and I think people are riding that effectively to zero right now.”

Despite the downturn, he remains optimistic about other areas of crypto. He believes DeFi and stablecoin growth could provide the next major narrative, though they currently lack the visibility and excitement that memecoins once generated.

“The trio of Melania, Libra, and Lazarus through Bybit just means the story is basically over,” Hougan concluded.