Then the American president Donald Trump launched his own meme cryptocurrency on January 17, days before his return to the White House, I was halfway up a Swiss Alp attending a crypto conference in the town of St. Moritz.
Memecoins, which typically have no purpose other than financial speculation, were having a moment. The year before, millions of new memecoins had flooded the market; a few, like Fartcoin, had risen to billion-dollar valuations. Pump.Fun, a platform for launching and trading memecoins, had become one of the fastest growing crypto launchpad companies ever. Now the president-elect took action.
At lunch on the second day of the conference, under the ornate stucco ceiling and gold chandeliers of the venue's dining room, I found a table designated for a conversation about memecoins. While other tables were half full, the memecoin workshop was oversubscribed; latecomers pushed chairs together to create two full rows.
The discussion was moderated by Nagendra Bharatula, founder of investment firm G-20 Group. Bharatula recently co-authored an article arguing that memecoins, despite their youth, had a place in the portfolios of professional investors. In the previous six months, a basket of 25 “blue-chip memecoins” – an oxymoron if ever there was one – had outperformed bitcoin by 150 percent, he pointed out. Some attendees murmured their approval.
Since then, the luster has faded from the memecoin market. The paper value of Trump's coin, which soared to a peak of $14 billion two days after its launch, has fallen to about $1 billion. Hundreds of thousands of small investors lost their shirts. Pump.Fun's daily revenues, a measure of general interest in memecoin trading, are barely more than a tenth of what they were in January. The memecoin gold rush has led to a slew of lawsuits.
Next: the stablecoin. While memecoins are symbolic of reckless abandon and unwavering profiteering in cryptoland, stablecoins are a symbol of the industry's search for purpose and respectability. Designed to maintain a stable 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 when the US has declared itself open to crypto activity, where previously crypto companies feared a regulatory backlash under the Biden administration, stablecoins have supplanted memecoins as the coin à la mode – and breached the mainstream.
Although stablecoins have been around since 2014, they are mainly used by crypto traders as a safe haven during periods of market volatility, and not by ordinary people. The concept also faced resistance from regulators who were skeptical of a new form of money; Diem, a stablecoin company founded at Meta, shut down in 2022 due to widespread opposition.
