The CEO of ARK Invest, Cathie Wood, forecasts that memecoins will ultimately become ‘worthless.’ Nonetheless, she believes that certain coins, like TRUMP, may ‘stand the test of time.’
In a discussion with Bloomberg television, Wood clarified that she does not invest her personal funds into these coins. She contends that many of the viral coins circulating in the market, which have emerged from internet memes and AI chatbots, “are unlikely to hold significant value” in the coming years.
Rather than placing her faith in memecoins, the founder of ARK Invest expressed her trust in more well-established cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). Wood asserts that these digital assets are currently “multiplying” and will continue to grow stronger over time.
Wood cautioned investors considering a foray into the memecoin market to “exercise caution,” as the time will soon come when these viral coins will be deemed “worthless.”
“Experiencing financial loss is often the best teacher, and many will realize that the SEC and regulators are not shouldering any responsibility for these memecoins,” Wood noted. However, ARK Investment Management has faith that some coins, including the TRUMP (TRUMP) token, will “withstand the test of time.”
In late February, the U.S. SEC’s Division of Corporation Finance stated that it does not categorize memecoins as securities. Instead, they are classified as “collectibles” and will remain outside the realm of regulation.
Are memecoins on the brink of collapse?
As of now, memecoins represent a combined market cap of $51.6 billion. In December of last year, the total market cap for memecoins peaked at $137 billion. Since that time, it has plummeted by around $86 billion, which is more than a 60% drop.
The market has witnessed the dramatic decline of several viral memecoins. Notable examples include the LIBRA memecoin, endorsed by the Argentine president, which saw a 94% price drop, and the official TRUMP memecoin, which has experienced a decline of nearly 85% from its peak value.
According to on-chain data from ARK Intelligence, viral memecoin expert Murad Mahmudov’s crypto portfolio, primarily consisting of memecoins, has plummeted by over 80% within a two-month span. As of January 18, Murad’s crypto assets were valued at $54 million, but by March 18, that figure had sunk to about $12 million. On March 11, the value dropped to just over $10 million.
The price of Murad’s primary holding, spx6900 (SPX), fell dramatically from a high of $1.52 to $0.39, marking a decrease of nearly 80%. Other memecoins in his portfolio, such as GIGA, RETARDIO, MOG (MOG), and MEMDEX, also suffered significant losses.
A recent analysis from Matrixport indicated that the memecoin market shows no signs of recovery, despite the recent rise in global liquidity and a weakening U.S. dollar. Additionally, the daily revenue of leading memecoin launchpad Pump.fun has significantly declined in recent months.