Are memecoins dangerous for the industry? One man says yes.
According to Lucas Kiely, the chief investment officer for Yield App, memecoins are hazardous. Mainly because of their speculative nature since the majority of those who invest money in them “never see it again.”
“They are dangerous in the way they damage the credibility of the entire cryptocurrency industry; they are dangerous in the way ownership is so highly concentrated, and they are dangerous because they are proliferating,” he said.
Kiely believes that most memecoins are “unabashed scams”, typically “created in the bedrooms of degens.” Accordingly, their purpose is to make the most out of the union that crypto and social media have. In other words, promote a token online in order to pump it.
“Whether it’s a Squid Games token — which saw $3.38 million swiped — or coins launched on the deaths of former Berkshire Hathaway Vice Chairman Charlie Munger and former Secretary of State Henry Kissinger, these coins now pump and dump in a weekend, taking millions of dollars with them,” he says.
He also draws on the examples of PEPE and BALD that’s built on Coinbase’s new layer-2 blockchain, Base.
Launched on a Sunday morning, by BALD had achieved a market cap of $85 million by evening. By Monday the lead developer had pulled his liquidity, sending the token’s price plunging by around 90%.
There are several reasons why.
First, they indeed are often scams and highly dodgy in general. We reported about some of them such as Chad coin.
Second, even if they’re not a scam, they’re still subject to higher volatility than the so-called more stable group of altcoins like Ethereum.
Memecoins’ ardent fans are likely to argue otherwise, pointing out that they are beneficial since they are much less complex than Bitcoin and altcoin.
In a similar vein, they serve as an easy way to popularize tokens thus attracting attention and mainstreaming the once niche sphere. This especially applies to projects like Doge that has been boosted by Elon Musk on several occasions.
While the representatives of both sides are unlikely to change their opinions swiftly, we advise that you do your own research and decide for yourself what they are.
Previously, GN Crypto reported about Memecoin Madness: Airdrops on Arbitrum.
“They are dangerous in the way they damage the credibility of the entire cryptocurrency industry; they are dangerous in the way ownership is so highly concentrated, and they are dangerous because they are proliferating,” he said.
Kiely believes that most memecoins are “unabashed scams”, typically “created in the bedrooms of degens.” Accordingly, their purpose is to make the most out of the union that crypto and social media have. In other words, promote a token online in order to pump it.
“Whether it’s a Squid Games token — which saw $3.38 million swiped — or coins launched on the deaths of former Berkshire Hathaway Vice Chairman Charlie Munger and former Secretary of State Henry Kissinger, these coins now pump and dump in a weekend, taking millions of dollars with them,” he says.
He also draws on the examples of PEPE and BALD that’s built on Coinbase’s new layer-2 blockchain, Base.
Launched on a Sunday morning, by BALD had achieved a market cap of $85 million by evening. By Monday the lead developer had pulled his liquidity, sending the token’s price plunging by around 90%.
Are they dangerous indeed?
It goes without saying that memecoins are a highly contested subject, and not everyone is happy about them in the cryptospace.
There are several reasons why.
First, they indeed are often scams and highly dodgy in general. We reported about some of them such as Chad coin.
Second, even if they’re not a scam, they’re still subject to higher volatility than the so-called more stable group of altcoins like Ethereum.
Memecoins’ ardent fans are likely to argue otherwise, pointing out that they are beneficial since they are much less complex than Bitcoin and altcoin.
In a similar vein, they serve as an easy way to popularize tokens thus attracting attention and mainstreaming the once niche sphere. This especially applies to projects like Doge that has been boosted by Elon Musk on several occasions.
While the representatives of both sides are unlikely to change their opinions swiftly, we advise that you do your own research and decide for yourself what they are.
Previously, GN Crypto reported about Memecoin Madness: Airdrops on Arbitrum.
