ARK Invest CEO Cathie Wood predicts that memecoins will wind up becoming ‘worthless.’ However she believes some coins like TRUMP will ‘withstand’ the test of time.
In an interview with Bloomberg television, Wood revealed that she does not use her private funds to invest in these coins. This is because she believes that most of the viral coins floating around in the market, millions of them spawning from internet memes and AI chatbots, “are not going to be worth very much” in the future.
Instead of placing her confidence in memecoins, the ARK Invest founder expressed her confidence in the larger more established cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH) and Solana (SOL). According to Wood, these crypto assets are currently “multiplying” and will only grow stronger overtime.
Wood warned traders putting their money into the memecoin market to “beware,” because sooner than later the viral coins will be rendered “worthless.”
“There’s nothing like losing money for people to learn, and they’ll learn that the SEC and regulators are not taking responsibility for these memecoins,” said Wood. However, the Ark Investment Management believes that some coins will “withstand the judgment of time,” including the TRUMP (TRUMP) token.
In late February, the U.S. SEC’s Division of Corporation Finance declared that the agency does not consider memecoins as securities. Instead, they are seen as “collectibles” and will remain unregulated.
Are memecoins heading to zero?
At press time, memecoins make up $51.6 billion in combined market cap. In December last year, the overall memecoin market cap reached a peak of $137 billion. Since then, it has decreased around $86 billion or more than 60%.
In fact, the market has seen many viral memecoins crash. These include the Argentinian President-endorsed LIBRA memecoin that experienced a 94% price collapse and the official TRUMP memecoin, which has fallen nearly 85% from its peak price.
According to on-chain data from ARK Intelligence, viral memecoin analyst Murad Mahmudov’s crypto portfolio, which consists mostly of memecoins, has fallen by more than 80% in just two months. On Jan. 18, Murad’s crypto assets still reached a value of $54 million. However as of March 18, Murad’s assets are only worth around $12 million. On March 11, the value was even smaller, barely reaching $10 million.
The price of Murad’s main holding, spx6900 (SPX), fell from a high of $1.52 to $0.39, a drop of nearly 80%. Aside from SPX, the crypto trader’s other memecoins, such as GIGA, RETARDIO, MOG (MOG) and MEMDEX, also fell sharply.
A recent report from Matrixport indicated that the memecoin market has shown no sign of recovering, even with the recent rise in global liquidity and the U.S. dollar weakening. Not only that, leading memecoin launchpad Pump.fun’s daily revenue also decreased significantly in recent months.
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