Are Memecoins Just a Passing Fad? Cardano Founder Thinks So

Cardano founder Charles Hoskinson recently expressed strong criticism of memecoins, likening them to fleeting celebrity fame. In an interview on the Wolf of All Streets YouTube channel, he argued that 99% of memecoins are unsustainable and exist merely to benefit a small group of insiders.

Hoskinson pointed out that although memecoins can grow quickly, they begin to lose value if they do not support a strong ecosystem.  People must get engaged and utilize the currency for it to last any period.  Without this ongoing engagement, people will quickly lose interest, demand drops, and so will value.  “This is why 99% of memecoins will fail,” he said, “because they are just paper and someone has to build community and real engagement for it to have legs.  

If you cannot get critical mass or real engagement, people will move on.”Another issue is how memecoins currently distribute the coins.  Hoskinson stated that insiders simply inflate the token value and sell it for a large profit.  It sounds like inside people are making short-term profits, and developers have no motivation to continue to grow and support their currency once it takes off and they make their returns.

Memecoins and Their Impact on the Crypto Market

Hoskinson also raised concerns about the broader effect of memecoins on the cryptocurrency market. He argued that they drain liquidity rather than contribute to meaningful innovation. Comparing the situation to “moving water from one side of the bathtub to the other,” he suggested that capital invested in memecoins ultimately ends up in the hands of project founders rather than fostering technological advancement or network growth.

“There’s a drain at the bottom of the tub. You’re not adding liquidity—you’re losing it over time,” Hoskinson warned, emphasizing that this trend hurts the industry as a whole.

Despite his criticisms, Hoskinson did not dismiss memecoins entirely. However, he emphasized that real value in the crypto space would come from innovations such as Bitcoin DeFi, tokenized real-world assets, and algorithmic stablecoins. These developments, unlike viral tokens with no clear roadmap, offer tangible benefits and long-term growth potential.

Cathie Wood’s Perspective on Memecoins

Hoskinson is not the only one skeptical. Cathie Woods, CEO of ARK Invest, expressed her doubts in an interview with Bloomberg, saying she expects that most memecoins will eventually end up “worthless,” but noted that memecoins gained traction due to the universal integration of blockchain and AI technology. Wood noted that technology made it easy and how almost anyone could create and deploy thousands of tokens, and many who get into memecoins do not focus on utility or long-term economics. 

“Our funds are staying away from memecoins,” said Woods, who wants investors to be aware of the risks with memecoins. “Millions of new tokens are being created and have no value, and nothing has given global regulators the authority to call them securities,” she said. “If I have one message to people buying memecoins: buyer beware.”

Declining Interest in Memecoins

According to data from Dune Analytics, warnings may be warranted by a steep drop in memecoin activity.  On January 23, memecoin transactions averaged over 71,000 each day, and, by April 1, that was down to 9,000. In addition, the market cap of Solana’s biggest memecoins has more than an 85% drop from a yearly high of $81.83 billion. Official Trump (TRUMP), Bonk (BONK), Fartcoin (FARTCOIN), Dogwifhat (WIF), and Pengu (PENGU) have all taken tremendous losses in the decline of investor confidence. As memecoin skepticism builds, industry leaders continue to highlight investing in cryptos that represent sustainable value and real-world utility.

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