Meme coins, initially born as internet jokes, have evolved into assets capturing the attention of all levels of investors, including world leaders.
What are meme coins?
Meme coins are a type of cryptocurrency that thrives on community engagement, internet culture, and social media hype. Unlike other cryptocurrencies such as Bitcoin, they do not have intrinsic value. They are often likened to casino chips rather than regulated investments. Initially created as jokes, meme coins gained traction through speculative interest, with Dogecoin being a pioneer.
The link between meme coins and fraud
There are several criminal risks associated with meme coins. For example, in 2024, the U.S. authorities charged major crypto companies and 18 individuals with crimes against casual investors. These frauds often rely on key players in the industry who inflate prices and trading volumes through fake trades. Another issue is pump-and-dump schemes, where prices are artificially inflated before large sell-offs that leave investors with losses.
The future of meme coins
Amid rising uncertainty following the failure of the $TRUMP token and the downfall of Libra, meme coins are losing favor. Many experts believe their rapid proliferation could have negative consequences for the cryptocurrency market.
Investors should approach meme coins with caution, viewing them more as entertainment or gambling rather than investments. The high speculative nature and risk of fraud make them dangerous for laypeople.
