The following piece is a guest article and opinion from the founder of SquidGrow.
Memecoins have sparked unprecedented upheaval within the cryptocurrency landscape. Analysts often perceive this turmoil as a dichotomy — some disparage memecoins as nothing more than speculative assets, while others champion them for posing a challenge to low-float, high-FDV venture capital-backed tokens.
However, it’s time for a fresh viewpoint. One that transcends the binary perspective and views memecoins as both speculative assets and a counterpoint to VC-backed tokens, giving rise to market volatility. By recognizing the potential of memecoins to generate chaos, we can see that this chaos is a catalyst for the emergence of a utility-driven token economy.
The upheaval of memecoins is beneficial for the industry
In 2024, memecoins captured investor interest and became the leading narrative in the market. Fueled by relatable humor, collective mimetic desires, and rampant virality, the memecoin market surged to $137 billion by December 2024.
Unlike high-value token offerings from VC-backed projects that restrict access for retail investors, memecoins have created a level playing field. It’s no surprise that over 42% of participants were first-time investors when US President Donald Trump and First Lady Melania Trump released their memecoins.
At Consensys 2024, a representative from LayerZero Labs discussed how memecoins support crypto’s success in the ‘narrative war,’ due to their appeal to the average person. Indeed, speculation serves as a crucial utility and feature of memecoins’ functionality.
Yet, unchecked speculation can also pose risks. This was evident when the memecoin market cap plummeted by 60% to roughly $53 billion in March 2025. Although external circumstances such as geopolitical tensions and global trade conflicts negatively influenced market dynamics, internal issues also played a role in the decline of memecoins.
Malicious individuals exploited unsuspecting retail investors and extracted funds via scams like rug pulls, fraudulent presales, pump-and-dump tactics, and phishing schemes. The downfall of the Libra token, backed by Argentine President Javier Milei, ultimately sealed the fate, eradicating $4 billion of retail investments and diminishing investor trust.
Everything was thriving with memecoins until it wasn’t. The market unraveled into total disarray. However, this chaos prompted a crucial reevaluation within the sector. Stakeholders began to see that memecoins could not thrive in the long run solely based on their speculative appeal or as an alternative to VC-backed tokens.
This upheaval serves as a much-needed wake-up call for the industry. It has urged investors and token developers to recognize the importance of developing a utility-driven token economy for sustainable value creation. Without altering the fundamental premise of memecoins, stakeholders should seize this moment of chaos to integrate utilities into the memecoin landscape.
Capitalizing on the opportunities within chaos
During the Memecoin Supercycle keynote at Token2049 Singapore, a speaker articulated that the token itself is the product. In the context of a chaotic memecoin market, simply having a token is insufficient to provide value for investors; developers must capitalize on the product and explore new monetization avenues.
Currently, memecoins are trapped in an insular economy, with investors merely rotating through various tokens on trading platforms to realize profits. To stabilize this chaotic environment, it is essential for memecoins to diversify into yield farming, staking, and liquid staking options to generate new market liquidity.
In essence, memecoins need to escape the gambler’s mindset of achieving generational wealth and instead embrace their potential as key players in decentralized finance (DeFi). Investors should also stop viewing memecoins as mere chips in a casino and start employing them in broader financial markets.
The current chaos surrounding memecoins highlights the necessity to evolve from a mere product to an entirely functional crypto ecosystem. This product must form the foundation upon which utility-focused decentralized applications (dApps) can be built to address real-world challenges.
For instance, a memecoin project could develop a decentralized application or a SaaS tool that appeals to a wider DeFi audience. The profits from this venture could be reinvested into the memecoin, ensuring a steady capital influx to mitigate price drops.
Much of the turmoil associated with memecoins stems from rug pulls and pump-and-dump schemes that have eroded investor confidence in the asset class. To restore this trust, memecoin projects can create tools that address key market pain points, such as liquidity lockers.
On another note, the memecoin community plays a crucial role in this chaos. Well-compensated project ambassadors, celebrity content creators, and influencers often show little genuine interest in the project beyond their financial incentives. They may buy up tokens in bulk and sell them at the first indication of a price drop or insider information.
Therefore, the ongoing turmoil within the memecoin sector serves as a vital reminder of the importance of cultivating a strong and organic community. This community can provide steadfast support for the memecoin ecosystem, enhance its utility, and protect the token from sudden fluctuations in price.
Once the chaos settles, meme tokens should not forsake their playful nature in an attempt to mimic traditional financial instruments. Rather, the upheaval is an urgent call to combine utility and humor to forge an inclusive and enduring financial ecosystem.
In a Pulitzer-nominated book, it was noted that “Chaos is a science of process rather than state, of becoming rather than being.” The memecoin tumult is also engaged in a transformative process aimed at evolving into a utility-driven meme economy, moving away from being strictly speculative assets devoid of intrinsic value.
For the broader cryptocurrency landscape, the memecoin upheaval signals a crucial turning point. Moving forward, meme tokens are poised to usher in a new era of on-chain finance.
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