Memecoins
Meme Coins and Macros: US Credit Card Holders Most Stressed Since 2012 | Currency News | Financial and economic news
- The percentage of credit card loans in serious default has risen to its highest level in more than a decade.
- This could indicate a difficult period for the US economy and speculative activities.
- Major meme coins are down 20% in four weeks.
U.S. consumers are increasingly struggling to keep up with credit card loan payments, painting a challenging picture for the economy and speculative activity in non-serious assets like meme coins.
The percentage of credit card loans in serious default, with balances outstanding for more than 90 days, increased to 10.69% in the first quarter, the highest level since the second quarter of 2012. recently published data from the New York Federal Reserve showed. Although balances fell by $14 billion to $1.12 trillion in the first quarter, they are still 13.1% higher than a year earlier.
Cracks in consumer financing are one of the most troubling economic data points, said Austan Goolsbee, president of the Federal Reserve Bank of Chicago. She said earlier this year, adding that it’s often a leading indicator that “things are about to get worse.”
Growing debt means less disposable income and a weakened propensity to invest in risky assets like meme coins. Second in an article written by Luigi Guiso, Tullio Jappelli and Daniele Terlizzese in the American Economic Review, debt constraints can lead individuals to keep a lower percentage of their wealth in illiquid and risky assets.
Interestingly, meme coins, which are considered among the riskier of digital assets, have been under pressure over the past four weeks, falling more than market leader bitcoin {{BTC}}. Major meme coins by market value such as DOGE, SHIB and WIF fell more than 20% versus bitcoin’s 2.4%. Coingecko the data shows.
Even if consumer finances are weakening, this does not necessarily mean a complete collapse of meme coins, as the “degens” may persist. Degen, or people engaged in high-risk speculative operations in the cryptocurrency market, are not fundamentally different from early adopters of the Internet, AllianceDAO’s Qiao Wang said in a blog postdescribing them as: “Financial risk takers who are brave enough to try unproven products.”
They don’t pay attention to metrics, tokenomics, fundamental analysis or technical analysis, as noted by Ledger Academy and are “committed to the projects and communities in which they invest.”
Kelly Greer, head of American sales at Galaxy, said degen are likely to remain active in the market despite rising debt levels.
“60% of Americans have credit card debt and this continues to increase. It’s no coincidence that gambling and degeneration also proliferate, @zerohedge may be right that the economy is dying – but doesn’t agree on the memes that die with it, the degens will play longer than the economy will remain solvent,” Greer said on X.
This story originally appeared on Coindesk