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The memecoins sector is by far the best performing and most prominent in 2024.
Memes started booming in the market in Quarter 1, between January and March, surprising many.
This phenomenon gave birth to the barbell portfolio strategy, which combines blue-chip assets and memecoins. As a result, other crypto assets tend to underperform compared to the surge in the price of memes tokens.
This has sparked debate and a search for the reasons behind the phenomenon.
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Questions about the Future of Memecoin
The question that arises then is: “Will the memecoin hype continue in the next year?”
Many are jealous that others are profiting from their meme coin investments.
For example, a $1,000 investment in WIF tokens at the end of November 2023 suddenly saw its value jump to $115,000. This phenomenon made meme coin a reason for the outside world to consider the crypto industry a Ponzi scheme.
In the episode “Attention Economy,” memes are discussed as fueling anxiety and self-discovery in the crypto industry.
This raises a fundamental question: Do meme coin fundamentals matter?
Is crypto just a casino?
Is crypto the future of technology, with the potential to unify the global financial system, or is it the biggest scam in history?
Will it change the world, or is it just another Ponzi?
The ponzi view of crypto dominated in 2024. However, 2025 is predicted to show more views that see the potential of this technology.
2024 also witnessed a resurgence in the popularity of barbell portfolios that combine large market cap cryptos (relatively low risk) and ecoins (very high risk).
The question is, will this strategy still hold true in 2025?
Will ecoins still dominate, or will the crypto market return to fundamentals?
Paradigm Shift in 2025
As with most things, the correct answer is usually somewhere in the middle. The crypto market is predicted to change in 2025.
For the first time in years, the future of the crypto industry looks very exciting, even for people outside the industry. Markets are always looking to the future, and a bright and hopeful future projection will fuel the growth of the crypto industry and its assets.
If Bitcoin breaks the $100,000 mark, crypto-related stocks like Coinbase and Robinhood will surge significantly.
The expansion of their product range and even the significant rally of traditional stocks like Tesla and MSTR could be positive indicators.
This is due to the end of a poor regulatory regime and a potential change of administration in the United States that would be more supportive of the crypto industry.
If the Trump administration upholds its campaign promises, more transparent and fairer regulation may be on the horizon.
Before the US presidential election, cryptocurrencies’ outperformance was limited.
However, since then, the outlook for the future has changed.
The crypto industry is no longer fragmented but moving in unison. Fundamental sectors that lagged behind in the last 10 months are showing strong performance.
One of the best signals to identify potentially superior crypto assets is to track those that rebound best during market swings.
Last November was a case in point, where this move could clearly signal institutional investors’ arrival.
Until this year, institutional capital has been reluctant to invest in cryptocurrencies due to regulatory uncertainty.
However, this began to change with the approval of the Bitcoin Spot ETF, albeit with the SEC’s reluctance. This approval lays the groundwork for future institutional investments.
Removing an aggressive legal regime and replacing it with the promise of fairer regulation will open the door to more significant capital investment. This fast-growing industry will no longer be seen as an investment risk but as a risk to be avoided.
If BlackRock feels that a Bitcoin ETF is good enough, and the United States government might devise a Bitcoin reserve strategy, institutional investors will also feel comfortable.
Institutional investors will look for familiar investment opportunities. While some may dabble in ecoins, they will likely be more interested in cryptocurrencies in the DeFi or infrastructure sectors rather than animal-themed coins.
Source: Coinglass
The difference in treatment of the Ethereum ETF before and after the US presidential election demonstrates the change in institutional demand for cryptocurrencies other than Bitcoin.
Institutions will look for cryptocurrencies that generate yield and implement models familiar to the traditional financial world. Sophisticated investors will gravitate towards cryptocurrencies with fundamentals.
The market is realising this, as seen by the price rally of DeFi tokens and related sectors. Traditional money managers entering the crypto world will seek those who can help them with their investments.
Conclusion: To Everything Rally?
If the last 12 months have been dominated by barbell portfolios, 2025 is predicted to be characterized by a phenomenon similar to the everything rally of the previous cycle.
This will be the beginning of a resurgence of focus on fundamentals-driven crypto assets.
Crypto assets such as blue-chip DeFi with proven track records, popular layer one infrastructure, or emerging sectors such as AI or DePIN have the potential to experience significant growth.
However, this doesn’t mean all coins and tokens will experience a dramatic rise, and it doesn’t mean the virality of memes will end. Memes are here to stay and are part of the crypto ecosystem.