Meme Coins and Macro: U.S. Credit Card Holders Most Stressed Since 2012

As a researcher with a background in economics, I find the current trend of rising credit card delinquency rates and declining meme coin values to be a concerning development for the U.S. economy and the crypto market respectively.

The American consumer is finding it more difficult by the day to meet their credit card payment obligations, casting a worrying outlook on the economy and fueling heightened interest in less serious financial investments such as meme coins.

In Q1, the New York Federal Reserve reported that over 10.69% of credit card loan balances, which have remained unpaid for over 90 days, reached a high not seen since Q2 2012. Despite a decrease in outstanding balances by $14 billion to $1.12 trillion during this period, they still represent a 13.1% rise compared to the previous year.

Consumer finance fissures represent a significant cause for economic concern, according to Austan Goolsbee, President of the Chicago Federal Reserve Bank. He noted earlier this year that these cracks can serve as a warning sign that economic conditions are likely to deteriorate further.

As a researcher examining individual financial behavior, I’ve come across evidence suggesting that an increasing debt burden reduces the amount of disposable income available for investing in volatile assets like meme coins. According to Luigi Guiso, Tullio Jappelli, and Daniele Terlizzese’s article published in the American Economic Review, such borrowing constraints can result in individuals maintaining a smaller percentage of their wealth in illiquid and risky investments.

As an analyst, I would rephrase the given statement as follows: Despite consumer finances becoming less stable, it’s important to note that this does not automatically signal the demise of meme coins. The behavior of certain crypto market participants, referred to as “degens,” can persist despite economic instability. In a blog post, Qiao Wang from AllianceDAO likened these individuals to early internet adopters, describing them as: “Bold financial risk-takers who are willing to experiment with unproven products.”

As a dedicated crypto investor, I focus on more than just numbers and metrics. Instead, I prioritize building meaningful relationships with the teams behind the projects I’m interested in and actively engage with their communities. This approach, as emphasized by Ledger Academy, allows me to truly understand the potential impact and long-term value of my investments.

As the Head of Americas Sales at Galaxy, I have observed that even with rising debt levels, degenerate traders are expected to remain engaged in the market.

Approximately two-thirds of Americans carry credit card debt, a trend that persists and unfortunately, problem gambling and other vices are also becoming more prevalent. Zerohedge’s assessment that the economy may be in trouble might hold some truth, but it’s important to note that people’s tendency to gamble could continue even after the economic solvency has been exhausted.