Opinion by: George Verbitskii, founder of Tymio
Memecoins led the Crypto narrative last year, leading a series of high -profile events where most entrepreneurs lost money as the insider benefited. The Libra token only, by some estimates, resulted in $ 4.4 billion in public losses. Unlike the previous crypto cycles where the widespread market growth rewarded the holders, the conclusion now that speculation -haka has created an environment where the chances of average success entrepreneurs are thin. How did the Memecoins happen to drive the market to a dead end, and would it end?
Speculation -haka or investment?
Investment and speculation -haka are fundamentally different games with unique policies. Investment is not about making fast money. It is about buying the right owners to protect the capital from long haul. Usually, investors are not waiting for the right “entry point” but purchase assets will be held for years. Such properties grow in relation to fiat currencies based on key factors. For example, stock, gold and bitcoin (Btc) rise against the US dollar, facing unlimited release and inflation.
Some owners have excessive growth drivers -rising demand of ownership, growing company income or even the adoption of Bitcoin by governments -but these are bonuses. The main point is that your investment should not lose all its amount against Fiat. Investors follow the long -term macroeconomic trends, helping them maintain the power of purchase.
On the other hand, speculation is a zero-sum game where the minority income is due to the most majority. Usually, such people are pursuing fast income. This is what happens to Memecoins. Unlike traditional investment, they lack intrinsic value, dividends or return of interest. While in the case of Bitcoin, the “Greater Fools” to buy after an entrepreneur may be companies that have adopted the Bitcoin standards, followed by the whole country who has established Strategic Bitcoin reserves after the US, in the case of a token like Libra, the bigger fool is the one who bought it after Javier Milei’s Javier Milei’s announcement.
Unregulated gambling
Memecoins operate similar to online casinos. They provide hobbies and promise fast income but only favors those who create and promote them. Unlike regulated gambling, where risks are well-known, memecoins are often hyped by influential figures-beginning with popular Crypto influencer Murad and ending with the US president-and, as such, social media accounts. The harsh truth is that, as in a casino, the odds are deeply favored by the insider and early adoptions while most people suffer losses.
Recently: Solana’s Token Minting Frenzy loses steam while Memecoins
The Memecoin Craze clearly succeeds in the speculation and psychological triggers -this is the game that changes emotions and leaves the players empty. Platforms such as Pump.fun, which facilitates memecoin launch, reap Huge incomeThat proves that sale of shovels is the best way to earn from a gold rush. How does the opening of a casino require a license and selecting a location in a strictly designated area, while anyone can launch their own Memecoin?
Well, the situation is likely to change as soon as possible.
Will it end?
Lack of regulatory administration enables the explosion of memecoins. How did we get here? Let us remember the SEC activities in recent years, especially suits against major decentralized financial protocols (DEFI) and large crypto companies who have tried to play fair. Another serious step is Operation Chokepoint 2.0In the direction of the previous US administration against the crypto industry as a whole. All of this is not only stifled that well-intended companies that create something significant in crypto but also do not directly trigger a counterweight in the form of other players who have taken advantage of unclear policies.
As a result, crypto exchanges have recently been listed in most memecoins almost immediately after their release. The disturbance in the field of regulation has become a crypto industry in a large global casino. Earlier, everyone hoped to win this gamble, today, with the losses, it seems that the general failure has been placed.
There is a beam of hope. The current US administration may not be evenly called “crypto-friendly,” which means we are likely to see significant regulatory development this year. This is especially important for the DeFI sector, which has long found the product of the product and is rapidly developing, getting traditional financial markets (banks, brokers and other intermediaries).
It is important to rewrite the outdated financial regulations as soon as possible. Old rules are designed for a system based on trust in centralized mediators, whereas the new framework must include smart contracts – in other words, the blockchain code can be implemented.
Stronger regulatory frameworks may identify more stringent requirements for token launch, including the mandatory disclosure of personalities and restrictions of creators on centralized exchange lists.
But market participants can be aware of costly mistakes even without direct intervention and be more careful about Memecoin investments. After a series of harsh but sad memecoin rugs, the web3 community should finally realize that such projects rarely reward risk acquisitions. If someone still decides to take a chance, they should treat it like a casino trip: just bring the amount that they are willing to lose and make the joy of this experience.
For those where this method does not appeal or the real serious about growing their net worth to pass it on to future generations, welcome to the real world of Bland, regular Bitcoin purchase. It seems that the market is just starting to realize it.
Opinion by: George Verbitskii, founder of Tymio.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
