Over the years, meme cons have changed from mere online jokes to assets that are worth in the billions. This move has attracted people, from everyday investors to large financial institutions and even presidents of various countries, such as the United States and Argentinian presidents. Meme coins were once thought of as playful and fun parodies since they were linked to internet jokes, but with the increasing eruption of coins linked to celebrities, viral trends, and even politicians, these coins are now very volatile and mere speculative assets. Let’s explore the wild world of meme coins and the risks associated with them. What are meme coins? Meme coins are a type of cryptocurrency that grows based on community engagement, internet culture, and social media hype. They do not have any intrinsic value beyond these, unlike cryptocurrencies like Bitcoin , which offer some form of value as a digital asset. They are often viewed as akin to casino chips instead of a regulated investment. They were initially created as parodies or jokes, but due to speculative interest, they gained traction, such as Dogecoin (DOGE) being a forerunner. There are others, such as Shiba Inu and Floki Inu, which have a huge community, but a vast majority of these meme coins do not have strong followings. Interestingly, Donald Trump created a $TRUMP token some days before he was inaugurated as president. This token was marketed as an expression for the meme coin and cryptocurrency community. However, like its counterparts, it increased by around 200% before it crashed below its offering price within days. This has been the rule, and there have been no exceptions, not even for tokes launched by presidents. The link between meme coins and fraud There are several criminal risks associated with meme coins. One instance occurred in October 2024, when the United States authorities charged top crypto companies and 18 individuals with several crimes against casual investors. It is worth noting that these frauds are usually dependent on key players in the cryptocurrency sector, often termed market makers. They artificially inflate prices and trading volumes via wash trades, creating fake transactions that suggest more buyer interest for the unsuspecting everyday investors. However, this isn’t the only issue; pump-and-dump schemes where prices are also artificially inflated before a major sell-off that leaves investors with losses, is another issue. Individuals considering investing in the cryptocurrency industry must know how these scams work to protect themselves. The future of meme coins With the increasing uncertainty of meme coins after the failed launch of $TRUMP and President Javier Milei promotion of Libra which tanked drastically, the native token of meme coins token Solana has been on a freeride down from its January all-time high. Many believe that the proliferation of meme coins at an alarming rate may result in huge consequences as these tokens largely detract from the fundamentals of cryptocurrency assets. Endnote Every investor must view meme coins with caution, just like entertainment and gambling instead of a portfolio investment. Meme coins are highly speculative in nature, and with their vulnerability to fraud and pump-and-dump schemes, it poses a huge risk to everyday investors, especially inexperienced ones.
