Despite all the silliness, the memecoin craze has been embraced by some corners of the crypto industry. In search of outsized returns, a handful of hedge funds have Invest in memecoin this year. Other investment firms, like Pantera Capital, consider memecoin to be “Trojan horse” has the potential to introduce new people to cryptocurrency.
Robert Le, a cryptocurrency analyst at market data firm PitchBook, said the idea is that memecoin activity on a particular cryptocurrency network will translate into a ready audience for future projects with Practical utilities are built on the same basic infrastructure. “It brings some kind of tangential value to other real projects,” Le said.
But others say the memecoin phenomenon has the potential to damage cryptocurrencies by perpetuating the notion that the industry is nothing but a haven for gamblers and gamblers. “At best it looks like a risky casino. Or a series of false promises masking a casino,” wrote Eddy Lazarin, CTO at the crypto division of venture capital firm a16z, in April. “This has a profound impact on adoption, regulation/law and builder behavior. I see the damage every day. You should too.”
The irony is that memecoin has largely escaped the attention of US financial regulators under the Biden administration, while entrepreneurs trying to establish meaningful use cases for the cryptocurrency have rejected. investigation targetChris Dixon, head of cryptocurrency a16z, said in an interview with WIRED last year. “The dumbest cryptocurrencies, like Dogecoin, are completely meaningless and silly—it's completely legal,” Dixon said.
There is a potential future in which memecoins could be used by entrepreneurs as a means to raise capital for serious crypto projects without having to give away equity, Khan said. But for now, they represent financial speculation in its rawest form. “We have consistently been in this position where our industry is seen as a decentralized version of Macau or Vegas. This does not help us in this way,” he said.
Regardless of whether memecoin harms the cryptocurrency industry's prospects or reputation, a crackdown of some form is still possible, industry watchers say. It's the amount of money flying around and the level of risk for traders, industry watchers say.
“Memecoins is purely a PvP game. For there to be winners, there must be losers. “A lot of the people who can least afford to lose money will be the ones who lose the most,” Khan said. “There must have been a crackdown at some point.”
Because memecoins are unlikely to compare easily with traditional investment assets, Le said, they are probably best regulated by gambling regulators. “This is basically unregulated gambling. It will probably depend on the goals of the gambling regulator in each country,” he said. “Through the grapevine, I have heard some state regulators in the United States talking about implementing some type of regulation.” Pump.Fun declined to comment.
However, until then, memecoin will continue to operate. On December 5, Hailey Welch of “Hawk Tuah” fame launched a coin. lost 95 percent of its value in the first hours of trading, leading to an outcry. That same day, merchants threw in money PNUa coin is modeled after The famous squirrel was euthanized late last year by the New York State Department of Environmental Conservation, currently valued at more than $1 billion.
Since launching MOTHER, Azalea has tirelessly promoted the coin to its 7.7 million followers on X, through a series of provocative images And meme posts. Part of her plan to ensure her coin lasts a long time – a rarity among memeocins – is to set up some sort of utility for it. The coin is now accepted as payment by a telecommunications startup in which Azalea has a stake. “I plan to be here for a long time. And I will be,” she said.
Ultimately, Azalea hopes to parlay memecoin into other business opportunities – including starting her own venture capital fund – by proving to potential partners and investors that she has can define and promote ideology.
“I have always been a sucker for trashy advertising,” she says. “I like to bait, troll, say slightly provocative things. I like to say things and act in ways that I know can be memorable… Ultimately, it's about virality.”