The scandal involving the President of Argentina and the Libra token has sparked discussions about the absurdity of the memecoin market and the core utility issues within the crypto industry, while uncertainties remain regarding regulation and market sustainability.

Author: Zack Guzman

Translated by: Baihua Blockchain

With the latest memecoin controversy settling down, the crypto industry finds itself at a familiar crossroads once again. This time, the catalyst for the storm is a scandal involving Argentine President Javier Milei and the ill-fated Libra Token—an event that has triggered widespread discussions about front-running, insider trading, and the increasingly absurd nature of the memecoin market.

To delve deeper into the impact of this turmoil on the entire industry, Coinage interviewed Travis Kling, founder of Ikigai Asset Management—who has been warning for over a year about the growing nihilism in the crypto market. In his view, this incident is the result of an increasingly reckless cycle reaching its peak.

“I think we are now rapidly experiencing a post-Gensler SEC ‘unregulated’ or ‘lightly regulated’ environment… People have started calling it ‘crime season,’ a term that gained popularity since Trump launched his memecoin,” Kling said. He believes that the involvement of political figures like Donald Trump and Javier Milei in memecoins has brought the absurdity of this market to a level that can no longer be ignored.

“It seems like Iggy Azalea is crawling forward, allowing Donald J. Trump to take steps ahead,” he quipped, emphasizing that an unexpected group of participants is currently making a fortune in the crypto market.

Kling believes that the memecoin ecosystem has completely degenerated into a realm of “the most nihilistic, extreme gambling, most worthless, most meaningless, most predatory, incredibly exploitative—only downsides, no upsides.” The question is whether this is merely a cyclical over-exuberance that will eventually fade, or if there is a deeper corruption within the crypto industry regarding its core use cases. “We still face a use case problem, a core utility problem. And right now, this kind of thing is filling that void.”

This atmosphere of nihilism is exacerbated by the behavior of market participants. Hayden Davis, a controversial figure who has repeatedly manipulated well-known memecoin projects, candidly stated in a recent interview with Coffeezilla: “This is an insider's game; it’s an unregulated casino.” Despite being aware of the risks, he has profited millions of dollars, while later retail investors have been completely harvested. Kling feels exhausted by it all: “It’s just suffocating… it’s so crazy, you know?”

The speed at which these scams operate is accelerating. Token projects that used to take years to cash out are now a thing of the past; as Kling puts it, “We have refined the scam to its extreme—Argentina's president completed a scam in the crypto market in just five hours.” Compared to the longer, slower cycles of past token sell-offs, this situation seems particularly absurd, but upon reflection, it doesn’t seem fundamentally different. “In the past, we at least pretended to do some projects; now it’s completely naked nihilism, and people are still lining up, eager to participate in this scam.”

Although memecoins have recently driven a surge in on-chain transaction volume, especially performing well in the Solana ecosystem, Kling warns that this may not be the positive signal investors are hoping for. He points out that the current mainstream institutional view is “owning a casino,” but the explosive growth driven by memecoins in Solana faces sustainability issues, and this bet may not be as secure as some imagine. Pantera’s portfolio manager Cosmo Jiang stated in a December interview with Coinage that in discussions among institutional investors, Solana has already surpassed Ethereum. Moreover, developers in the Solana ecosystem emphasized that Solana is much more than just memecoins.

“Memecoins have social attributes; they clearly impact the entire social aspect—the more attention they receive on social networks, the larger they become.” Mert said, “I don’t find it strange that they attract the most attention. But what I want to say is that the notion of ‘Solana only has memecoins’ is completely wrong; the fact is, Solana provides the best token issuance experience, whether it’s issuance, transfer, trading, or storage in wallets, all built on a truly usable, scalable infrastructure that can support a large number of users.”

However, aside from the short-term impacts caused by memecoins, a larger question remains: If such topics dominate the headlines in the industry, what does the crypto market actually represent? Kling believes, “The phenomenon of memecoins is closely tied to the core utility issues of the entire altcoin track. If there were a large number of altcoin projects that could be pointed to and said, ‘Look at this, it has achieved real-world application,’ our discussion today would be completely different. Unfortunately, such projects are few and far between.”

Despite feeling frustrated with the current state of the market, Kling has not given up. He acknowledges that the industry is in a survival crisis, but he also sees hope. “The current crypto market is extremely frustrating, but at the same time, we have unprecedented support from the highest levels of the U.S. government, which is simply unbelievable.” Recent friendly attitudes from the Trump administration regarding crypto policy, including the appointment of David Sacks and prioritizing regulatory clarity, suggest that the long-term trajectory of the crypto industry may not be as bleak as it seems.

“This is a fight worth fighting for.” Kling said. Whether the entire industry will take this opportunity to self-correct and turn towards real practical applications remains to be seen. But one thing is clear: the era of reckless scams may be coming to an end.

Article link: https://www.hellobtc.com/kp/du/02/5682.html

Source: https://finance.yahoo.com/news/memecoin-bubble-bursting-means-crypto-171712725.html

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