Arthur Hayes advises against dismissing memecoins too hastily

BitMEX co-founder Arthur Hayes has urged caution when dismissing all memecoins as “stupid,” arguing that they can actually benefit the blockchain networks on which they are launched. In a recent interview with Real Vision CEO Raoul Pal, Hayes explained that memecoins generate attention and attract new users and developers to blockchains, thereby adding value to the crypto industry. According to Hayes, the chains that are capable of supporting this culture will be the ones that hold the most value, with Solana and Ethereum being the most well-positioned networks to capture the attention garnered by memes. Last year, the Solana network experienced significant growth in activity following a memecoin frenzy in November, with numerous non-meme projects launching on the network in the subsequent months. Bitcoin also saw a notable increase in network and development activity after a flood of BRC-20 tokens and Ordinals around the same time. Pal believes that memecoins will likely become increasingly popular among younger crypto investors, as they tap into the “gaming mentality” prevalent among Gen Z and Millennials. Both Pal and Hayes anticipate that the attention directed towards memecoins will continue in the future, with the Solana-based memecoin Dogwifhat (WIF) set to be projected on the Las Vegas Sphere in the coming months. This dog-themed memecoin has recently surpassed the Ethereum layer-2 network Arbitrum (ARB) in terms of total market capitalization. Despite the potential benefits, industry executives caution that memecoins also pose numerous risks. In a recent investor note, Franklin Templeton highlighted that while memecoins offer the opportunity for quick profits, they lack fundamental value or utility, making them susceptible to risk. Ethereum co-founder Vitalik Buterin expressed his general disinterest in memecoins but encouraged investors and developers to explore ways to make these tokens useful or charitable, rather than outright dismissing them. He stated that he would prefer the crypto space to embrace the fun associated with memecoins rather than oppose it. Despite the risks involved, memecoins have been the best-performing asset class in the crypto sector over the past month, according to data from CoinGecko. In the past week, memecoins listed on CoinGecko have gained 20% in aggregate, outperforming layer-1 network tokens and decentralized finance (DeFi) tokens, which saw gains of 6% and 5.4% respectively.