YEREVAN (CoinChapter.com) — Arthur Hayes, co-founder of BitMEX, advises taking a second look before dismissing memecoins as “stupid,” arguing that they can actually benefit the blockchain networks they launch on.
Are Memecoins More Than Just a Laugh? Arthur Hayes Weighs In
During a March 30 interview with Raoul Pal, CEO of Real Vision, Arthur Hayes made the case that memecoins contribute to the crypto sector by attracting attention, which in turn brings in new users and engineers to the blockchain space.
“You can poo-poo these things as stupid and valueless, but if it brings attention and more engineers to the space, it’s positive value for the chain itself.”
Arthur Hayes said, “The chains embracing this culture will hold value,” highlighting Solana and Ethereum as the networks best positioned to capture the attention flow driven by memes.
Crypto Network Growth Booms Amid Memecoin Sector Rally
Last year, the Solana network saw a significant increase in activity following a memecoin frenzy in November, leading to a wave of non-meme projects launching on the network in the subsequent months.
Similarly, a surge of BRC-20 tokens and Ordinals on the Bitcoin network around the same time sparked significant growth in both network and development activities.
Pal thinks memecoins will become increasingly popular with younger crypto investors, tapping into the “gaming mentality” that’s prevalent among Gen Z and millennials.
“This is the same thing, just gaming with money,”
Pal and Hayes both observed that the attention on memecoins is set to continue for a while. They pointed out that the Solana-based memecoin Dogwifhat (WIF) is expected to be featured on the Las Vegas Sphere in the upcoming months.
The dog-themed memecoin recently surpassed the Ethereum layer-2 network Arbitrum (ARB) in total market capitalization. As of now, WIF boasts a market cap of $4.5 billion, edging out ARB’s $4.4 billion.
Can One Utilize Joke Cryptocurrencies?
However, industry executives caution that memecoins come with numerous risks as well.
In a March 14 investor note, Franklin Templeton, a United States investment firm, pointed out that although memecoins might offer a chance for quick profits, they are vulnerable to risks due to their lack of fundamental value or utility.
Vitalik Buterin, Ethereum’s co-founder, expressed in a March 29 blog post that he’s not particularly keen on memecoins. Yet, he urges the crypto community and memecoin creators to innovate, making these tokens beneficial or philanthropic instead of merely dismissing them or showcasing superficial support. He states:
“I value the community’s quest for enjoyment and prefer that the crypto world move with this trend rather than resist it.”
According to data from CoinGecko, memecoins have outperformed all other asset classes in the crypto sector over the last month, despite their associated risks.
Over the past week, memecoins on CoinGecko have collectively soared by 20%, outpacing the 6% gain of layer-1 network tokens and the 5.4% rise in decentralized finance (DeFi) tokens.
