Ross Gerber blamed Trump and memcoins for 'cryptozyme'. Will bitcoin recover?

The boom of memcoins, many of which collapsed, leaving their investors with nothing, increased market participants' doubts about the effectiveness of investing in cryptoassets and, in the end, became one of the key reasons for the current "cryptozyme", believes the head of investment company Gerber Kawasaki Wealth & Investment Management Ross Gerber, writes Business Insider. It was the ecosystem of tokens promoted by celebrities, including, for example, US President Donald Trump, that triggered the outflow of capital from the digital asset market, the investor believes.

The launch of the Trump and Melania crypto-tokens by then-president-elect Donald Trump and his wife Melania during Trump's inauguration in early 2025, followed by the subsequent memcoin boom that eventually ended in a market crash, has led to investor fatigue and growing wariness of digital assets, says Ross Gerber. Memcoins promoted or created by celebrities either turn out to be fraudulent schemes (rug pulls) or create a similar impression, he says. Either way, by investing in these assets, ordinary market participants often end up with losses, while celebrity promoters make money, Gerber added.

As examples, he pointed to the Melania token and the coin of the Trump-affiliated cryptocurrency company World Liberty Financial Coin. The quotes of both have collapsed dramatically over the past year (by 92% and 56%, respectively). Crypto projects launched by former New York City Mayor Eric Adams and internet personality Haley Welch ($HAWK) also "depreciated shortly after launch, leaving investors with losses," Gerber noted. Trump 's January 2025-launched memcoin Trump has also lost about 80% over the past year. Since Jan. 20, 2025, its value has jumped nearly 500% in two days, from $10 to $57.6. On January 19, the value of the token was rising even higher - up to $75, but on the same day fell sharply after Trump and Melania announced the launch of the memcoin by the first lady of the United States, the Associated Press noted.

"People rush out to buy these [meme] assets because they actually believe the scam, and then they take a loss - and that money doesn't come back to them. It's just taken away from them," Gerber notes.

In addition, the investor believes that the Trump administration's more lenient approach to regulating digital assets is making the crypto market less attractive to retail investors.

Gerber noted that it is extremely difficult for bitcoin to move to sustainable growth in a situation where investors are generally scared away from the digital asset market. Demand in the crypto market is now strengthening mainly due to the influx of new participants, the investor believes.

Mohamed El-Erian, an economist and chief economic advisor at Allianz, agrees with him - he points to the decline in confidence in the crypto market as a factor of pressure on bitcoin and the sector as a whole. Bitcoin will find it difficult to return to growth until institutional investors increase their presence in the crypto market, El-Erian believes.

Memcoins are highly volatile and typically don't have much intrinsic value, Bloomberg wrote after the 90% collapse of Melania Coin. Their dynamics often depends on the viral effect or short-term hype, but such interest usually fades quickly, noted in conversation with the agency CEO and co-founder of FRNT Financial Stefan Ouellette.

The crypto market at the beginning of 2026 was in the phase of the so-called "cryptozyme". The main cryptocurrency - bitcoin - lost more than 45% compared to the October peak, and the largest U.S. crypto exchange Coinbase reported a quarterly loss of $667 million on February 12. Coinbase shares, which collapsed by 7.9% at the end of the main session in New York on February 12, rose by 5% at the pre-market on February 13. Since the beginning of the year, they are down almost 38%.

Bitcoin is now cheaper than it was in the first half of January 2025 - before Donald Trump's inauguration for a second term. Back then, the cryptocurrency was worth more than $100 thousand, while now it is trading at around $67 thousand.

On February 10, Bernstein economists maintained their forecast of bitcoin price at $150 thousand by the end of 2026. And Tom Lee, a well-known crypto-optimist and chief investment officer of Fundstrat, said that bitcoin may be a more effective means of saving than gold.

At the same time, Standard Chartered, one of the most active global banks in the field of digital assets, lowered on February 12 the forecast of bitcoin for the second time in less than a quarter from $150 thousand to $100 thousand, while in December the bank predicted for the cryptocurrency price at the level of $300 thousand. He also warned that before the stabilization of prices bitcoin may fall to $50 thousand.

This article was AI-translated and verified by a human editor