Despite all the nonsense, the memecoin craze has been embraced by some corners of the crypto industry. In search of outsized returns, a small number of hedge funds have invested in memecoins this year. Other investment firms, such as Pantera Capital, consider memecoins to be a “trojan horse“It’s likely to introduce new people to cryptocurrencies.
The idea, says Robert Le, crypto analyst at market data firm PitchBook, is that memecoin activity on a particular crypto network will translate into a ready audience for future projects with practical utility built on the same underlying infrastructure. “It brings some kind of tangential value to other real projects,” Le says.
But others say the memecoin phenomenon is likely to harm cryptocurrencies by perpetuating the view that the industry is nothing more than a haven for gamblers and scammers. “At best, it seems like a risky casino. Or a series of false promises that mask a casino.” wrote Eddy Lazarin, chief technology officer of the cryptocurrency division at venture capital firm a16z, in April. “This profoundly affects adoption, regulations/laws, and builder behavior. I see the damage every day. “You should do it too.”
The irony is that memecoins have largely escaped the attention of US financial regulators under the Biden administration, while entrepreneurs trying to establish significant cryptocurrency use cases have come under investigation, said Chris Dixon, director of a16z crypto, in an interview with WIRED last year. . “The sillier cryptocurrencies, like Dogecoin, which makes no sense and is dumb, are perfectly legal,” Dixon said.
There is a potential future where entrepreneurs could use memecoins as a vehicle to raise capital for serious crypto projects without giving away capital, Khan says. But for now they represent financial speculation in its crudest form. “We have constantly been in this place where, as an industry, we are seen as a decentralized version of Macau or Las Vegas. This doesn’t help us at all,” he says.
Whether or not memecoins harm the prospects or reputation of the cryptocurrency industry, a crackdown of some kind is likely, industry observers say, such is the amount of money circulating and the level of risk for traders.
“Memecoins is absolutely a PvP game. For someone to win, someone has to lose. Many of the people who can least afford to lose money will be the ones who will lose the most,” says Khan. “There has to be an offensive at some point.”
Because memecoins defy easy comparison with traditional investment assets, Le says, it may be best if they are regulated by gaming authorities. “It is basically unregulated gambling. It will probably depend on who the gaming regulator is in each country,” he says. “Through the grapevine, I’m already hearing some state regulators in the US talk about implementing some type of regulation.” Pump.Fun declined to comment.
However, until that time, memecoins will continue doing their thing. On December 5, Hailey Welch, of “Hawk Tuah” fame, flipped a coin, which lost 95 percent of its value in the first hours of negotiation, which sparked protests. That same day, merchants were throwing money at PNUTa coin inspired by the famous squirrel euthanized late last year by the New York State Department of Environmental Conservation, currently valued at more than $1 billion.
Since the launch of MOTHER, Azalea has relentlessly promoted the coin to her 7.7 million followers on provocative images and meme posts. Part of your plan to ensure your currency has longevity (a rarity in memeokines) is to establish some kind of utility for it. The currency 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,” he says.
Over time, Azalea hopes to leverage memecoin to generate other business opportunities, including creating her own venture fund, proving to potential partners and investors that she can identify and tap into the zeitgeist.
“I’ve always been a big shit billboard guy,” he says. “I like to provoke, troll, say things that are a little provocative. “I like to say things and move in ways that I know can be memorable…Ultimately, it’s about virality.”