Crypto Market Poised for Shift from Memecoins to DeFi, Gaming, and NFTs
With regulatory conditions improving for major crypto marketplaces, analysts at research and brokerage firm Bernstein anticipate a shift in market liquidity away from memecoins and back toward more utility-driven tokens in decentralized finance (DeFi), gaming, and non-fungible tokens (NFTs).
The surge in memecoin activity in recent years stemmed from the regulatory crackdown on utility tokens and NFT projects under former Securities and Exchange Commission (SEC) Chair Gary Gensler. This forced the market toward "useless" memecoins as a workaround, Bernstein analysts, led by Gautam Chhugani, explained in a report released Monday.
However, the regulatory landscape is changing with pro-crypto former regulator Paul Atkins set to lead the SEC under President Trump, pending Senate confirmation. Additionally, a new crypto task force has been launched at the agency under Republican Commissioner Hester Peirce. This shift was underscored by the SEC’s recent decision to dismiss its securities law violations case against Coinbase and drop its investigation into NFT marketplace OpenSea.
Argentina's President to be Probed Over LIBRA Token Rug Pull (Source: Datawallet)
"A lot of blockchain activity was being fueled by extractive memecoin launches involving politicians and celebrities," Chhugani noted, referencing the controversy surrounding the Libra coin launch by Argentine President Javier Milei, which faced allegations of insider trading. This has led to a cooling-off period for memecoin launches, particularly on Solana, the analysts added.
What’s Next for Crypto as Memecoin Hype Fades?
A strategic Bitcoin reserve is emerging as a key priority for the Trump administration, according to Bernstein. Combined with strong inflows into Bitcoin exchange-traded funds (ETFs) and continued corporate treasury adoption, analysts project the leading cryptocurrency could reach $200,000 by year-end.
Stablecoins and real-world asset tokenization are also expected to play a critical role in the next phase of crypto adoption, particularly as regulatory frameworks for stablecoins and digital asset securities become clearer. Bernstein predicts stablecoins will have the most immediate impact on cross-border B2B payments, global interbank settlements, and remittances.
Stablecoins in Demand (Source: CEPR)
As regulations around digital asset securities evolve, innovations in tokenized equities and debt could open new fundraising avenues for corporations. The demand for stablecoins is also expected to expand the total addressable market for crypto exchanges and brokerages. Robinhood, in particular, could benefit significantly over the next two years as it integrates with Bitstamp and expands into staking, stablecoins, and derivatives.
Gautam Chhugani maintains long positions in various cryptocurrencies. Bernstein and its affiliates may receive compensation for investment banking services from Strategy. Additionally, Bernstein affiliates act as market makers or liquidity providers in Robinhood stock.
