Typically, the market remains calm when another memecoin fails. However, recent developments have shaken up the sector. When top officials got involved, a new era began.
It all started with the launch of the TRUMP and MELANIA memecoins. The TRUMP token’s launch was successful, giving early investors a chance to take profits. While TRUMP has fallen from its all-time highs, it remains in the top 50 cryptocurrencies by market cap.
For MELANIA, however, everything went wrong from the start. The coin has been in freefall for most of its existence.
MELANIA’s downfall made many crypto investors reconsider the role of fundamentals in the memecoin space. However, the real tipping point was the launch of the LIBRA coin, which was promoted by Argentina’s President, Javier Milei.
Milei posted about LIBRA on social media, but shortly after, he changed his mind and deleted the link. Unfortunately, it was too late. As soon as LIBRA raised funds from users who followed Milei’s «advice», its value plunged.
According to research, $99 million was withdrawn from the LIBRA liquidity pool shortly after its launch. The stablecoin USDC and Solana (SOL) were withdrawn, dealing a serious blow to the Solana project, which gained popularity amid memecoin boom.
The troubles in the memecoin sector didn’t stop there. Memecoins also played a role in the recent Bybit hack. Hackers from North Korea’s Lazarus Group stole nearly $1.5 billion worth of ETH and used memecoins to launder the stolen funds.
The failed launch of MELANIA, the LIBRA scandal, and Lazarus Group’s use of memecoins have posed a serious challenge for SOL, which had a strong 2024 due to the memecoin craze. Solana has already lost more than 50% of its value from the all-time highs it reached in January. What’s next?
The crypto market appears to be increasingly concerned about the lack of fundamentals in the memecoin sector. Institutional money — widely expected to be the key driver for crypto in the future — is unlikely to flow into this space in the near-to-medium term. No investment manager wants to risk their reputation by putting clients’ money into a coin that collapses immediately after launch. This lack of institutional support is a significant problem for SOL, which must find new sources of activity beyond the meme sector.
Key figures in the crypto industry have repeatedly highlighted the importance of fundamentals. To achieve sustainable success, any project must offer real utility. A professional team and a steady flow of investment are also essential. In the current market environment, investors must do their due diligence — analyzing the fundamentals of specific coins rather than chasing hype.