The memecoin boom—the phenomenon in which retail and institutional investors have poured their money into Dogecoin and Shiba Inu—seems to be coming to an end.
Or at least that is what chief investment officer of Bitwise, Matt Hougan, seems to believe. In an appearance on the YouTube channel of the investing website The Motley Fool, Hougan said the “memecoin supercycle” could come to a halt in the next six months. If it does, it will most likely be due to the rise of potentially fraudulent tokens like Melania and Libra.
The ‘memecoin supercycle’ could fizzle out in the next six months, according to Bitwise CIO @Matt_Hougan.
Hougan believes the emergence of scam memecoins like Melania and Libra could end the narrative’s dominance.
Read more here:https://t.co/UEhDs6zXWN pic.twitter.com/CktNXtyfAN
— The Defiant (@DefiantNews) February 26, 2025
The Fall of Memecoin Mania: Scams and Laundering Threaten the Narrative
Memecoins have very long been a quirky and unpredictable segment of the cryptocurrency market. Initially regarded as a humorous or speculative investment, many of these tokens, such as Dogecoin, have gained considerable prominence and incited substantial price upswings, thanks in part to social media-driven, hype-fueled celebrity endorsements. However, according to Hougan, this trend may now be nearing its end, with the emergence of fraudulent projects casting a dark shadow over the sector. He specifically points to the appearance of scam tokens like $LIBRA and $MELANIA, which have raised red flags for both investors and analysts.
These tokens, starting from their high-profile marketing campaigns, have attracted attention for all the wrong reasons. The $LIBRA and $MELANIA projects have come under fire for allegedly having insiders with ulterior motives, including suspicions of market manipulation and money laundering. This is sending shockwaves through the memecoin community, as these actions threaten the entire market’s legitimacy.
The latest controversy surrounding $LIBRA and $MELANIA has only intensified these concerns. It was recently revealed that the insider team behind these tokens used a highly suspicious strategy to launder funds. They spent an eye-popping 19,846 SOL (worth approximately $2.76 million) to purchase a memecoin called POPE, a token with a market capitalization of less than $150K. In a move that appeared to have little regard for the economic fundamentals of the memecoin, the team subsequently sold the POPE tokens for a mere 175 SOL (worth $24K), resulting in a massive loss of $2.73 million.
It seems that the $LIBRA and $MELANIA insider team is laundering funds.
They spent 19,846 $SOL($2.76M) to buy a memecoin(POPE) with a market cap of less than $150K, and sold it for 175 $SOL($24K), losing $2.73M!
That $2.73M was effectively funneled to other wallets in a “legal”… pic.twitter.com/ACDC0EDcjx
— Lookonchain (@lookonchain) February 26, 2025
Yet, the most disturbing aspect of this transaction was the manner in which the money was manipulated. The loss was not simply a misstep in a high-risk investment. Instead, the $2.73 million was funneled through various wallets in what seemed a “legal” manner, potentially indicating a sophisticated money-laundering operation. The funds were moved in such a manner that it is next to impossible to trace the exact flow of money, raising serious questions about the legitimacy of the operation.
This event has not only ignited worry over the integrity of certain memecoin ventures but also raised doubts about the overall soundness of the memecoin market. With purported insiders using these tokens as fronts for shady dealings, it’s becoming ever less clear which memecoins are on the up-and-up and which are part of some larger con.
A Looming End to the Memecoin Supercycle?
Emerging by the day, memecoins are becoming ever more competitive, seeking not just a foothold but a true place in the cryptocurrency market; many of them frankly trying to copy the success of Dogecoin—and of course, that’s a failed strategy, because if you have to try so hard to claim you’re part of a funny meme, then maybe you don’t have as much going for you as your creators would like us to think. And the sad thing is that in trying to go somewhere, some of these tokens are decidedly going nowhere.
The increase in scams and insider trading doesn’t just affect individual investors, it also puts the entire investment narrative surrounding memecoins in a bad spot. If projects like $LIBRA and $MELANIA keep making the sort of headlines one would prefer not to make, they could cause a real and lasting decline in investment interest surrounding whatever they are a part of—memecoins in this case.
Considering all these recent events, we cannot regard Hougan’s prediction that the memecoin supercycle may be ending as far-fetched. Each day seems to bring news of more token projects designed for little more than generating income for those behind the scheme. Projects that serve as vehicles for scams or money laundering are unlikely to win over the hearts and minds of investors. We are already seeing a souring in sentiment (in no small part thanks to the meme nature of memecoins). When combined with the big question marks hanging over these projects, regulatory concern seems a more serious and more possible threat than it is to some crypto projects.
The Future of Memecoins and Investor Caution
Although it may appear to be the case, the memecoin supercycle is not yet over. The more broad cryptocurrency market is still rich with opportunities. Even though recent events have rocked the space, attracting new participants to the industry, decentralized finance (DeFi) and blockchain technology continue to attract new participants to the industry. However, much like any speculative market, the memecoin bubble is starting to show signs of bursting. Individuals who have become enmeshed in the memecoin madness should be very careful and consider the following:
The promise of fast profits can lure even the most cautious investors. Scams are on the rise, and with them, the use of cryptocurrencies for shady deals. Investing in something you don’t understand can have very painful consequences.
There are no guarantees that anything in this space will retain its value, and most analysts expect that many, if not most, of these coins will become worthless.
Going ahead, it’s vital that the regulators and the wider cryptocurrency community up their game to ensure that blockchain technology isn’t being used for bad things.
Mainstream projects that really want to provide value and innovate have to do a much better job of pursuing that aim, and they have to work a lot harder to distinguish themselves from all the dubious stuff that’s out there, especially the nonsense that seems to have been created just to part fools with their money.
Right now, the memecoin supercycle looks like it has the potential to be a fairly good conduit for scams.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news!
Image Source: itchaznong/123RF // Image Effects by Colorcinch
Source: https://nulltx.com/the-memecoin-supercycle-faces-uncertainty-amid-rising-scams-and-money-laundering-concerns/