Memecoin ‘retail mania’ could go the way of ICOs and NFTs, say execs

Memecoins have been instrumental in getting people into crypto, but the high returns that are attracting new investors may not be sustainable, crypto executives say.

In a panel discussion covered by Cointelegraph at the Canadian Futurists Conference on August 13, Jelena Djuric, CEO of Apchain Noble, said that while the era of memecoins is still moving forward, she doubts their longevity in the market.

“Similar to ICOs, similar to NFTs, it's not going to last forever, and it's going to be interesting to see what's next because inevitably, you know, it's going to end.”

In the year As of August 14, CoinGecko lists 1,673 memecoins, with a combined market cap of about $41 billion.

However, Djuric sees memecoins as the latest “retail mania” for crypto.

“The first phase, the first phase was obviously ICOs in 2017, which is the first opportunity to generate significant revenue for retail,” she said.

You don't have that anymore, although there are token launchers and Layer 2s and Cosmos Chains launching. You don't really have the chances of a comeback.

The initial coin offering (ICO) was launched in 2017 and raised approximately $4.9 billion. In 2018, this figure rose to $33.4 billion. However, in 2019, it dropped to over $370 million.

Djurik Virtual Tokens (NFTs) are another example. NFTs have seen a huge surge in popularity in 2020, with sky-high prices.

In the year Coingecko is currently listed for 6.99 Ether (ETH) or approximately $19,009.

“I think Memecoins are both at a perfect opportunity when we have very low gas fees on Solana and when the Solana chain has demonstrated its ability to facilitate this really high dynamic trading,” said Djuric.

“And secondly, you had an appetite. You had this latent appetite. We've had a few years after the DeFi winter and the NFT boom, and now I think it's the right opportunity.”

Crypto platforms should accept memecoins

It is unclear at this point whether memecoins will go the way of ICOs and NFTs. Dean Skurka, president of asset management firm WonderFi, says the platforms are still popular and should be embraced.

I think there's a real social element here, a community member, with retail in general, certainly there's a clear trend when it comes to memecoins. And I think it's important for platforms like ours to embrace it,” he said.

According to Skurka, embracing trends when they appear and facilitating conversations around them gives the best chance to get more people on board the ecosystem and possibly keep them around.

“It doesn't mean that every memecoin, investment or speculative investment ends up winning, but it really brings people into the ecosystem,” he said.

“Then, it's about learning and sticking and finding a balance between speculative investments and maybe some stable investments like Bitcoin, Ethereum and others.”

Related: 98.6% of memecoins fail to even launch on pump.fun

Maxwell Nicholson, founder and CEO of digital investment platform Blossom, agrees that speculative assets like memecoins attract people to the space and can make them stay and diversify their holdings.

Nicholson said the 2022 bear market was a first for many people. They entered the scene during the previous bull run and experienced the volatility of the market for the first time.

“They really burned. He really taught people complexity. We've seen a lot of people start diversifying their portfolios,” he said.

Many people started buying more big blue chips in the crypto and stock market.

Nicholson said it could be “a good thing for the markets” because if more people get burned, people will destroy crypto.

“It drives people to the stock market, and some of them may not come back to the market.”

“Many of these people, they start, don't bet the whole house on these speculative assets, but set aside a small part of their portfolio, say, you know, five to 20% on the more speculative assets, while they leave. They put the bulk of their portfolio into long-term investments,” he said. He added.

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