Research Firm That's Been Bullish on Crypto for Years Says the Market Has Peaked — and It's Launched a Meme Coin to Prove That the Frenzy Has Gotten Out of Hand

In a note to clients on Monday, BCA Research said its short-term outlook on the cryptocurrency was turning more bearish.

A research firm that's been bullish on crypto for years is now saying the market has peaked — and it's even launched a meme coin to prove that the frenzy has gotten out of hand.

In a note to clients on Monday, BCA Research said its short-term outlook on cryptocurrency was turning more bearish. The firm began the year bullish on bitcoin and crypto broadly, and previously said it saw bitcoin climbing past $200,000.

After that call, bitcoin surged, drawing more institutional cash and inspiring lofty price targets.

"But is this the right time to enter? We do not think so. The surge in memecoins, record-breaking Bitcoin ETF inflows, and retail speculation suggest excess optimism, historically a warning signal," BCA strategists wrote on Tuesday.

Leaning into the speculative mania that's gripped crypto markets, BCA said it launched Liquidity Trap, a meme coin meant to "hedge against the possibility that financial markets have fully embraced the absurd."

The token, which trades under the ticker LTRAP, traded well below $0.01 on Tuesday. The coin's market cap fell nearly in half to $28, down from $54 on Monday, according to data from Solscan.

The coin saw a flurry of activity when it was first launched, which is likely attributable to meme coin traders who frequently gamble on newly issued coins to turn a quick profit, BCA's Juan Correa told Business Insider.

"When they realized the coin wasn't going to a million dollars, they stopped trading it," Correa said.

Correa and Artem Sakhbiev, a research analyst at the firm, said that the coin was not an official investment product or linked with BCA Research or its affiliates. The strategists reiterated that they believed the coin was essentially worthless.

"It is also called Liquidity Trap because it is literally a trap for your liquidity — as in any money that you put here, you will most certainly lose forever," Correa and Sakhbiev wrote in a note. "We believe its intrinsic value is zero and that investing your stakeholders funds in it is a serious breach of fiduciary responsibility."

BCA is still bullish on bitcoin over the long term, with a $200,000 price target for the crypto. But for now, digital assets look too frothy for investors to get a good deal, Correa said, pointing to risks from macro developments and high levels of speculation.

The firm added that the share of bitcoin supply trading for a profit is over 90%, a key threshold that has historically signaled major tops in bitcoin prices.

Meanwhile, eight of the top 10 most downloaded finance apps as of January 20 were platforms that allow crypto trading, according to Sensor Tower data.

"We are concerned that this raging optimism is a sign that we are near at top," Correa and Sakhbiev wrote. "Thus, we believe we are at a point where it is prudent to begin cashing out on gains and holding off on any incremental allocations," they later added.

BCA said it would become a "more willing" buyer of bitcoin when its price drops to around $75,000, representing a decline of more than 20% from current levels.

Bitcoin's price has been on a wild ride since Trump won the election in November, with the crypto rallying past $100,000 amid optimism that the president will dial back regulation in the industry and potentially create a national bitcoin stockpile.

Bitcoin traded around $97,000 on Tuesday, down by about 11% from its all-time-high of $109,000 in late 2024.