CEO and founder of Into The Cryptoverse, Benjamin Cowen, has reignited debates over market structure and risk hierarchy with a stark warning about memecoins. In an X post today, he argued that memecoins sit at the lowest rung of crypto’s capital stack, and when liquidity tightens, that rung does not rotate into other assets. “It disappears,” he wrote.
Cowen’s remarks arrive amid ongoing market stress, declining altcoin valuations, and a broader liquidity contraction that has pushed capital toward higher-quality crypto assets such as Bitcoin and Ethereum.
Memecoins Round Out the Capital Stack
Cowen’s thesis frames the crypto market as a layered capital structure. At the top sits Bitcoin, viewed by institutions as the most secure and liquid digital asset. Below it are Ethereum and large-cap altcoins, followed by mid-caps, low-caps, and finally memecoins at the bottom.
In expansionary cycles, capital tends to move down this ladder as risk appetite grows. Traders rotate profits from Bitcoin into progressively higher-risk assets in search of outsized returns. However, during liquidity contractions, the process reverses. Capital retreats upward into perceived safety.
According to Cowen, memecoins occupy the most fragile position in that structure. Thus, when liquidity shrinks, they do not benefit from rotation. Instead, their demand completely evaporates.
The comment continues Cowen’s fight against memecoins as he earlier criticized exchanges for listing low-cap memecoins, arguing that they negatively impact institutional perception of the crypto market.
On-Chain Data Points to Consolidation Upward
Several replies to Cowen’s post pointed to on-chain metrics supporting this view. Analysts tracking wallet behavior noted that during recent liquidity crunches, smart money flows have concentrated into Bitcoin and Ethereum rather than moving down the risk curve.
Accumulation addresses for Bitcoin are reportedly seeing inflows at levels comparable to 2022, while memecoin wallets have experienced net outflows. Market cap data further illustrates the divergence. Some traders observed that the total memecoin market cap has fallen by roughly 38% over the past 30 days, compared to Bitcoin’s 26% over the same period.
The pattern suggests that liquidity is consolidating upward, not redistributing downward, reinforcing Cowen’s “capital stack” framing.
Is a Shift from Memecoins to a Utility-First Market Imminent?
The broader debate touches on whether crypto should transition away from memecoins toward a more utility-driven phase. With capital flowing into regulated Bitcoin ETFs and institutional vehicles, and Bitcoin dominance climbing toward the 60% level, some traders speculate that speculative capital is being absorbed by more established assets.
Yet the industry has repeatedly demonstrated that retail speculation remains a powerful force during bull cycles. Whether the current liquidity contraction represents structural maturation or merely another reset in the risk cycle remains an open question. For now, the ladder appears to be unwinding from the bottom up.
Temitope Olajide
The CoinRemark Team
