Bitwise CIO Matt Hougan Says Crypto Needs ‘Another Story’ As Memecoin Narrative Fizzles Out
The cryptocurrency market has been on a rollercoaster ride, and it seems like the industry is in dire need of a new narrative to rally around. According to Matt Hougan, Chief Investment Officer (CIO) at crypto asset management firm Bitwise, memecoins have lost their luster, and investors need something more substantial to invest in.
In an interview with crypto influencer Scott Melker, Hougan shared his thoughts on the current state of the crypto market. He pointed out that the recent incident involving North Korea's Lazarus group attempting to launder funds through a memecoin platform was not a good look for the asset class. "The killer piece there was that [Lazarus] tried to launder the funds... I think that spells the sort of existential death of the meme coin craze," Hougan said.
The incident involved Lazarus Group stealing nearly $1.5 billion worth of Ethereum (ETH) and Lido Staked Ether (stETH) from Bybit last week. This event has highlighted the risks associated with memecoins and has led to a significant decline in their value. Solana, one of the top memecoin platforms, has seen its price drop dramatically, which Hougan believes is a sign that the market is moving away from this narrative.
"If you have MELANIA and you have LIBRA and then you have it being used as a laundering facility, even in this permissive regulatory environment, people are not going to look favorably on North hackers finding a way to launder stolen [funds]," Hougan said. "That’s not going to do well so I think there’s going to be real pressure on the memecoin space."
Hougan believes that crypto investors now need a new narrative to rally around, potentially in decentralized finance (DeFi) or stablecoins. He pointed out that while these areas have shown promising growth, they still lack the same level of energy and excitement as the memecoin story.
"Outside of Bitcoin, the only real story that was sort of present and easily felt over the last six months [and] was positive was the memecoin story. It was injecting capital into the market, it was injecting energy into the market, and I think people are riding that effectively to zero right now and as a result, we need another story outside of Bitcoin," Hougan said.
Hougan is optimistic about the potential for new narratives to emerge in DeFi and stablecoins. He noted that there are "green shoots" in these areas, but they require more time to develop and gain traction. However, he also acknowledged that the memecoin narrative has fizzled out, leaving investors with a void that needs to be filled.
"I think those stories exist, I think you can see green shoots in DeFi (decentralized finance),I think you can see green shoots in stablecoin growth, but they aren’t as present and as vibrant as meme=coins and I think the trio of Melania, Libra, and Lazarus through Bybit just means the story is basically over," Hougan said.
In conclusion, Matt Hougan's words serve as a warning to investors that the crypto market needs a new narrative to rally around. The memecoin craze has lost its luster, and it's time for something more substantial to take center stage. While DeFi and stablecoins show promise, they still require further development and marketing to gain widespread adoption.