Bernstein’s research team led by Gautam Chhugani forecasts a cooling in memecoin activity as market focus redirects to utility-focused tokens in DeFi, gaming, and NFTs sectors.
By Mayowa Adebajo
Edited by Marco T. Lanz
Updated
2 mins read
Analysts at the renowned research and brokerage firm Bernstein have made a rather bold claim about the crypto market. In their latest report published on Monday, the analysts, led by Gautam Chhugani, believe that market liquidity is about to shift from speculative memecoins to utility-focused tokens. More so, in sectors such as decentralized finance (DeFi), gaming, and non-fungible tokens (NFTs).
Chhugani recalled that memecoins rose to fame as a kickback against the hostile disposition that the US Securities and Exchange Commission (SEC) had toward utility token and NFT projects. This was during Gary Gensler’s time as the head of the commission.
However, things have taken a new turn, and there is now an air of optimism on the regulatory front of the United States.
For what it might be worth, recent actions under the pro-crypto Trump administration may have informed these projections that Bernstein analysts have. Firstly, the top regulator has agreed to dismiss its lawsuit against Coinbase, an exchange it long accused of operating as an unregistered securities broker.
Also, the agency has officially brought to a close its investigation into several other entities, including NFT marketplace OpenSea and crypto platform Robinhood. That is, without pursuing any enforcement actions.
Notably, these developments took place following the appointment of crypto-friendly persons, such as Paul Atkins as the prospective SEC Chair and Commissioner Hester Peirce as the head of a new crypto task force.
According to Bernstein analysts, the new regulatory environment will undoubtedly bring about a cooling of memecoin activity. More so, in light of the recent negative publicity that memecoins received following allegations of insider trading that trailed the Libra coin launch.
From all indications, it appears as though liquidity will now redirect toward tokens with tangible utility. That is, as investors are expected to now focus more on DeFi platforms, blockchain-based gaming, and NFTs.
According to the analysts, stablecoins and real-world asset tokenization might be another area of crypto that enthusiasts should be fairly optimistic about.
With regulations highly expected for both stablecoins and digital asset securities, anticipation for an explosive growth for both sectors may also not be out of order, Bernstein analysts suggest.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.
