In Cryptoland, Memecoin Fever Gives Way to a Stablecoin Boom

When the American president Donald Trump launched its own cryptocurrency meme On January 17, a few days before his return to the White House, I was halfway up a Swiss mountain pasture attending a cryptography conference in the town of St. Moritz.

Memecoins, which generally have no use beyond financial speculation, have been have a moment. The previous year, millions of new memecoins had flooded the market; some, like Farcoinhad soared to billion-dollar valuations. Pump.Funa memecoin launch and exchange platform, had become one of the fastest growing crypto launchpad companies Never. Now the future president got down to business.

Over lunch on the second day of the conference, under the ornate stucco ceiling and gilded chandeliers of the venue’s dining room, I found a table reserved for a conversation about memecoins. While the other tables were half full, the memecoin workshop was oversubscribed; latecomers pulled out chairs to create two full rows.

The discussion was led by Nagendra Bharatula, founder of investment firm G-20 Group. Bharatula had recently co-wrote an article arguing that memecoins, despite their youthful spirit, had their place in the portfolios of professional investors. Over the previous six months, a basket of 25 “bluechip memecoins” – an oxymoron if ever there was one – had outperformed bitcoin by 150%, he noted. Some attendees murmured their approval.

Since then, the memecoin market has lost its luster. The paper value of Trump’s coin, which reached a peak of 14 billion dollars two days after its launch, collapsed until approximately 1 billion dollars. Hundreds of thousands of small investors lost their shirts. Pump.Fun’s daily revenue, an indicator of the general appetite for memecoin trading, amounts to just over a tenth of what it was in January. The memecoin gold rush spawned a a series of disputes.

Next: the stablecoin. If memecoins symbolize careless abandonment And flawless profiteer In the land of cryptocurrencies, stablecoins are a symbol of the industry’s search for meaning and respectability. Designed to maintain a stable valuation of $1, stablecoins are touted by their proponents as a faster, cheaper way to make everyday payments and international money transfers.

In a year where the The United States declared itself open to crypto tradingwhere previously crypto companies regulatory backlash feared Under the Biden administration, stablecoins have supplanted memecoins as the trendy currency – and broken into the mainstream.

Although stablecoins have been around since 2014they were mainly used by crypto traders as a refuge during periods of market volatility, not by ordinary people. The concept also faced resistance from regulators skeptical of a new form of money; Diem, a stablecoin company incubated at Meta, famously closed in 2022 in the face of broad opposition.