Memcoins are becoming a thing of the past: Bernstein predicts a decline in activity

By the beginning of 2025, the memcoin market has undergone significant changes. After reaching a peak capitalization of $137 billion in December 2024, by February 2025, the total value of memcoins had declined 59% to $56.2 billion.

Analysts at Bernstein argue that significant changes await this sector. In particular, experts predict a further decline in memcoin activity amid the transformation of cryptocurrency market regulation in the U.S.

Memcoins under pressure from regulators

According to the Bernstein report, the changing political environment in the U.S. and new approaches to regulation may lead to a capital flow from memcoins to other segments of the crypto market, such as:

• decentralized finance (DeFi),
• NFT,
• gaming tokens.

Previously, memcoins became a kind of "haven" for investors in the face of strict scrutiny from the U.S. Securities and Exchange Commission (SEC), headed by Gary Gensler. The SEC has filed 19 lawsuits against crypto projects in 2023, heightening investor fears and pushing investors toward less-regulated assets. Bernstein analysts, including Gautam Chhugani, argue that pressure from the SEC has forced the crypto market to look for alternatives. However, the situation began to change after Donald Trump won the U.S. presidential election, which could signal the beginning of a new phase in the crypto market's development.

Paul Atkins and the prospects for regulatory easing

After the U.S. election, Paul Atkins became a key candidate for the SEC chairmanship under Donald Trump's administration. Atkins is known for his positive attitude towards cryptocurrencies and favors more liberal industry regulation. In support of this policy, the SEC created a special working group headed by Hester Pearce, known for her critical attitude toward strict crypto industry regulation.

Recent events confirm the change in the regulatory vector. Specifically, in February 2025, the U.S. Securities and Exchange Commission (SEC) tentatively decided to drop its lawsuit against Coinbase, the largest U.S. cryptocurrency exchange. The SEC had previously filed a lawsuit against Coinbase in June 2023, accusing the platform of operating as an unregistered broker and trading in unregistered securities.

Also, in February 2025, the SEC dropped its investigation into OpenSea, the most significant non-fungible token (NFT) trading platform. Previously, in August 2024, the SEC sent OpenSea a Wells Notice indicating possible legal action against the company for suspected sales of unregistered securities.

These moves indicate a possible easing of regulation and a return of confidence in the cryptocurrency market by institutional investors. According to Ark Invest, interest in crypto assets among large investors increased by 30% following news of potential regulatory changes.

Expected capital flows

Bernstein analysts believe the decline in interest in memcoins will reallocate capital to more stable segments of the crypto market. This will primarily affect DeFi, NFT, and gaming tokens, which have a more apparent utilitarian value and can attract long-term investments.

Memcoins have previously attracted investors' attention due to viral marketing and speculative opportunities. However, a series of high-profile failures, including cases when celebrities backed dubious projects, led to losses among traders and negative consequences for the reputation of these tokens. For example, Argentine President Javier Milay supported the LIBRA project, which resulted in significant investor losses and hit his political reputation.

In addition, experts predict that in the coming months, a significant amount of capital will be directed into exchange-traded funds (ETFs) focused on bitcoin and other cryptocurrencies. In January 2024, the SEC approved the launch of several Bitcoin-ETFs, including products from BlackRock and Fidelity, which facilitated inflows of more than $10 billion in the first month of trading.

Bitcoin's (BTC) rise to $200,000?

In addition to the decline in memcoin activity, Bernstein analysts are making another high-profile prediction — a rise in bitcoin's value to $200,000 by the end of this year. This prediction is based on several factors, including improved regulation and increased institutional demand.

Bernstein analysts expect U.S. spot bitcoin ETFs to attract more than $70 billion in new investments in 2025, doubling the previous year's total. In addition, corporate investment in bitcoin is projected to exceed $50 billion, up from $24 billion in 2024. Companies such as MicroStrategy continue to increase their bitcoin reserves, demonstrating confidence in the asset's long-term value.

Bernstein emphasizes that their $200,000 forecast is "conservative" given Bitcoin's limited supply and growing demand from institutional and corporate investors. They also note that announcing a national U.S. bitcoin reserve could spark a global race to acquire the asset between nations, further supporting its value.

However, it is important to remember that the cryptocurrency market remains extremely volatile, and the realization of this scenario will depend on various factors, including the macroeconomic situation, the actions of the U.S. Federal Reserve, and the dynamics of bitcoin acceptance in traditional financial institutions.

Conclusion

The cryptocurrency market continues to evolve, and significant changes may await us in the coming months. Bernstein analysts believe the memcoin era is gradually ending, giving way to more mature assets. However, as always in the world of cryptocurrencies, uncertainty remains high, and investors should approach forecasts with caution.