The Memecoin Shenanigans Are Just Getting Started

Despite its silliness, the memecoin craze has been embraced by some corners of the crypto industry. In search of huge returns, a handful of hedge funds have Invested in memecoin this year. Other investment firms, such as Pantera Capital, consider memecoins to be “Trojan horse” might introduce new people to cryptocurrencies.

The idea is that memecoin activity on specific crypto networks will translate into a ready audience for future projects that have utility built on the same underlying infrastructure, said Robert Le, a cryptocurrency analyst at market data firm PitchBook. “It does bring some tangential value to other real projects,” Le said.

But others say the memecoin phenomenon could harm the cryptocurrency industry by creating a perception that the industry is nothing more than a haven for gamblers and scammers. “At best, it looks like a risky casino. Or a series of false promises to cover up the casino,” Wrote In April, Eddy Lazarin, chief technology officer of the encryption department of venture capital firm a16z. “This deeply impacts adoption, regulation/law, and builder behavior. I see harm every day. You should too.

Ironically, meme coins have largely escaped the attention of U.S. financial regulators under the Biden administration, while entrepreneurs trying to build meaningful use cases for cryptocurrencies have been stymied. Be the subject of an investigationChris Dixon, head of cryptocurrency at a16z, said in an interview with Wired last year. “The dumbest cryptocurrencies, like Dogecoin, are completely pointless and stupid — which is completely legal,” Dixon said.

Khan said it’s possible that in the future, entrepreneurs could use meme coins as a tool to raise money for serious crypto projects without giving up equity. But for now, they represent financial speculation in its most primitive form. “As an industry, we’ve been viewed as a decentralized version of Macau or Vegas. That doesn’t help us,” he said.

Industry observers say that regardless of whether meme coins harm the prospects or reputation of the crypto industry, there will likely be some kind of hit, such as the amount of money flowing and the level of risk faced by traders.

“Memecoins is definitely a PvP game. For someone to win, someone has to lose. Many of the people who can least afford to lose will be the ones who have the most to lose,” Khan said. “At some point there has to be a crackdown.”

Le said that because meme coins cannot be easily compared to traditional investment assets, they may be best regulated by gambling authorities. “This is basically unregulated gambling. It may depend on the remit of each country’s gambling regulator,” he said. “Through the grapevine, I have heard that some state regulators in the United States are talking about some kind of regulation.” Pump.Fun declined to comment.

Until then, though, memecoins will continue to play a role. On December 5, Hailey Welch of “Hawk Tuah” fame unveiled a coin that Lost 95% of value There was an outcry in the first hours of trading. On the same day, traders rushed to PNUTcounterfeit coins Celebrity squirrel euthanized late last year Funded by the New York State Department of Environmental Conservation and currently valued at over $1 billion.

Since launching MOTHER, Azalea has worked tirelessly to promote the token to her 7.7 million followers on X through a series of events. provocative images and meme post. Part of her plan to ensure her coin has a long lifespan (a rarity among meme coins) is to build some sort of utility for it. The coin is now accepted as payment Developed by a telecommunications startup in which Azalea has a stake. “I plan to stay here for the long haul. I will,” she said.

Ultimately, Azalea hopes to turn meme coins into other business opportunities, including starting her own venture fund, by proving to potential partners and investors that she can recognize and ride the zeitgeist.

“I’ve always been a big fan,” she said. “I do like to seduce, to troll, to say things that are a little provocative. I like to speak and act in a way that I know people can understand… At the end of the day, it’s about virality.