Key Points:
- As the excitement around memecoins tied to Donald Trump and Melania Trump grows, Balaji Srinivasan criticizes these tokens as lacking wealth generation, comparing them to gambling.
- Market interest in Trump-related coins has drawn liquidity away from the broader memecoin market, adversely affecting major tokens.
As the official memecoin linked to Donald Trump’s potential second presidential run approaches a market cap of $10 billion, and with Melania Trump’s new coin launch, Balaji Srinivasan, former CTO of Coinbase, stated in a thread on X that this category of tokens resembles gambling.
“A memecoin is a zero-sum lottery. There is no wealth creation. Every buy order is simply matched by a sell order. After an initial spike, the price eventually crashes, and the last buyers lose everything.” — Balaji (@balajis) January 19, 2025
Balaji emphasized that, unlike traditional investments, memecoins should be viewed merely as an entertainment venture similar to gambling in Las Vegas. He advised:
“Most should buy assets that retain their value over the long run. Sometimes memecoins can develop use cases that may help maintain their values in the spotlight.”
In response to inquiries about whether Bitcoin could be considered a memecoin, he defended Bitcoin’s credibility based on its substantial use cases and long-term resilience.
“Bitcoin serves as a foundational asset of a blockchain with substantial hashrate and has shown gradual growth rather than sudden spikes.”
Current market interest in the official Trump memecoin has reportedly diminished liquidity in other tokens, with CoinGecko indicating an 8% decrease in this category over the past 24 hours, while leading memecoins are down by over 10% today.
READ MORE: Bitcoin retraces to $100K, TRUMP Tanks 30% as Melania Memecoin Skyrockets
