The days of making big money on obscure memecoins during a crypto bull run may be fast coming to an end, according to lead Glassnode analyst James Check.
The on-chain markets expert predicted on Tuesday that a large cohort of young Bitcoin holders may now be holding onto meaningful sums of money that they’re less willing to gamble on riskier assets.
“Folks are increasingly unwilling to rotate into shitters as they know they will make it by just sitting in spot,” Check wrote to Twitter. “Don’t fuck it up. They punt on memes here and there but only to the same extent they bet on the football.”
Check argued that the primary source of demand for “shitcoins” until now has been “millennial crypto natives,” who are now moving from the “get rich” into the “stay rich” phase of their financial lives.
This theory is backed by numerous surveys showing that both crypto ownership and support are overrepresented among 18 to 40-year-olds. For instance, a Grayscale survey of US voters published Tuesday found that 62% of Gen Z believes crypto is the “future of finance.”
That said, the analyst believes the investment community has wisened up since the last bull market, and can separate the winners—like Bitcoin—from the altcoins that drive “no serious demand.”
Altcoin holders may, therefore, have trouble finding willing buyers for their largely speculative tokens.
“We may not be too far from the last gasp of alts,” he wrote. “Millennials and Gen Z are asking the next generations to buy their shitcoins, and it is no different to boomers asking them to buy overvalued houses.”
The analyst’s latest thesis has yet to play out, however. As Bitcoin rallied 50% earlier this year after receiving its own US spot ETFs, memecoins with no explicit use case including DOGE, SHIB, PEPE, and WIF surged even harder.
It’s an oft-repeated phenomenon that Bitwise CIO Matt Hougan has previously described as the “wealth effect.” When long-term Bitcoin holder get rich as demand for BTC rises, they tend to cash in the profits and feel comfortable using them to gamble down the risk curve.
Since altcoins have much lower volume and market caps than BTC, it doesn’t take as much money moving into the assets to pump their price dramatically, Hougan observed.
Check himself has frequently called attention to the firesale embraced by long-term Bitcoin holders earlier this year, indicating profit-taking behavior reminiscent of many previous bull markets.
As of early May, long-term Bitcoin holders appeared to return to hodling, needing “higher prices to motivate sales,” according to Check.