Memecoins has been in the news lately, mainly driven by the launch of the president’s $ Trump currency. Recently, the SEC of the United States clarified that, for the most part, Memecoins are not values, since they do not meet the Howey test. However, that does not mean that customers do not ask questions about these assets.
Then, in the cryptography of today’s advisors, Janine Grainger of Easy Crypto, based in New Zealand, provides a breakdown of what Memecoins are, how they work and the risks associated with them.
Then, Kieran Mitha, a next -generation investor, answers questions about learning about Memecoins in Ask to Expert.
– Sarah Morton
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Memecoins: Boom, Bust and Billion Dollar Bets
On January 17, the president -elect launched a new meme coin called Trump. Its market value reached a maximum of $ 14.5 billion in two days, but soon crashed for two thirds. According to reports, entities behind the currency obtained about $ 100 million in commercial rates in less than two weeks (and even more liquidations). However, hundreds of thousands of everyday investors lost significant amounts of money. Meanwhile, at the end of 2024, when Trump announced a government efficiency department (Doge), the Dogecoin of the cryptocurrency increased by 150%, far exceeding Bitcoin’s profits.
Moments like these have firmly put Meme coins in the investment radar. However, fed by exaggeration instead of utility, they create opportunities and risks to investors, and financial advisors must understand their unique market dynamics, since high -level network customers may ask about them despite their speculative nature.
Figure 1: Trump Coendesk view that collapsed shortly after the launch.
What are Memecoins?
Memecoras are cryptocurrencies that originate in Internet culture, social networks trends or jokes. Unlike Bitcoin or Ether, which, over time, have created a case for inclusion in a diversified portfolio, Memecoins thrive in exaggeration, community feeling and support of celebrities. While they often begin as a parody or a joke, viral marketing and speculative trade can give them a serious traction, although this is generally short duration.
Why do meme coins matter
Memecoras have gained conventional visibility due to their cultural and potential relevance for short -term profits. High profile figures such as Elon Musk have fed demonstrations with a single tweet, promoting speculative interest. But while merchants are attracted to the possibility of wealth during the night, meme coins are high -risk active with unpredictable price changes.
The price of meme coins can be shot or collapsed in a matter of hours, which leads to massive profits or total losses, such as ‘Fartcoin’, a joke file that reached a market limit of $ 2.2 billion through the viral attractiveness before plummeting as the first investors came out. Platforms such as Pump.Fun Explain this speculation by allowing users to create and exchange meme coins with minimal technical knowledge. This has led to an avalanche of short -term files that reinforce the high -risk nature of the market.
But are they legal?
Ironically, the regulatory position of the stock exchange and values commission has helped Memecoins prosper. While the cryptography promoted by public services faces scrutiny and legal obstacles, Memecoins operate in a gray area, since they do not promote financial yields. This has fed its proliferation.
THE DARK SIDE: The carpet throws and scam
Unfortunately, Memecoins is a breeding ground for ‘bomb and careless’ schemes, where influencers promote a token to increase their price and then retire, leaving everyday investors with value without value.
A recent example is the viral personality of the Internet Hailey Welch, who launched $ Hawk after online infamy. In a day, the market capitalization approached half a billion dollars before collapse and cause fraud accusations. Similarly, the president of Argentina, Javier Milei, inadvertently triggered a scandal when he promoted $ Libra, which also emerged and crashed, leaving him open to accusations of market manipulation. These incidents highlight why meme coins are often considered cryptocurrencies with little intrinsic value or long -term viability.
Figure 2: Hawk Tau ($ Hawk) Coendesk view, which collapsed shortly after the launch.
Memecoin investment considerations
Investors must remain cautious since many memecoras lack transparency. For those who are still interested, key risk factors include:
- Liquidity: The low negotiation volumes lead to extreme price changes, which hinders the entry or output positions.
- Community feeling: Social networks drive price movements. X (Twitter) and Telegram monitoring can provide market information.
- Tokenomic: Some memecoras drive scarcity, while others have unlimited supply, diluting the value over time.
- Pump and fall risk: The tokens aggressively marketed with unrealistic promises often indicate a short -term hype cycle instead of a sustainable investment.
- Early entrance vs. longevity: Entering early can be lucrative, but the risk of a sudden shock is high. Some investors prefer memecoins established with strong communities for pursuing the last trend.
While Memecoins can offer fast profits, their volatility and susceptibility to manipulation make them high risk assets. Advisors must educate customers about their speculative nature and emphasize proactive risk management. Ultimately, memecoras are more similar to games of chance than traditional investment.
–Janine Granger, CEO, Crypto Easy
Ask an expert
Q: I see that people on social networks become rich in Memecoins … Can I do the same?
TO: While some people have obtained significant profits from Memecoins, it is important to remember that social networks often highlight success stories by ignoring the many who lose money. Memecoras are highly speculative, and their prices can be driven by exaggeration, the support of celebrities such as Elon Musk and the feeling of the market instead of solid foundations.
If you are considering investing, address it with caution. Time is everything: many early buyers see significant profits, while those who buy lately face losses when the hype vanishes or the carpet is thrown away. If you invest, bring it as a high -risk bet instead of a guaranteed path towards wealth. Never invest more than you can afford to lose, and always do your own investigation before making any decision.
Q. What role does the community play in the success of a memory?
TO: The community is the backbone of any successful memecoin and supports the general feeling towards the project. Unlike traditional investments, where value is often linked to public income or services, memecoras thrive in the presence in social networks, viral trends and basic enthusiasm. A strong and committed community can boost adoption and maintain a relevant project, but without sustained interest, even popular memecoras can fade quickly. Before investing, verify how active the community is on platforms such as X, Discord and Reddit.
Q: How can I learn about Memecoins before investing?
A: The most effective method to acquire knowledge about Memecoins is through exhaustive investigation and active participation in the community. Start by the media of renowned cryptocurrencies, examining white whites and interacting with forums such as Twitter, Reddit and Discord, where communities actively discuss real -time projects. Consider factors such as the project website, the road map, the developer and the tokenomic commitment.
It is also crucial to understand the risks involved: memecoras are frequently characterized by high speculation; Therefore, becoming familiar with market trends, commercial strategies and potential scams can help you make well -informed decisions. It does not depend solely on people with exaggeration or influential people in social networks; Performing your due diligence is essential.
-Kieran Mittha, cryptography enthusiast and communications commanders
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