The crypto industry has been transformed into a global memocoin casino

Opinion: Georgii verbitskii, founder of Timio

Mimecoin has dominated the crypto narrative over the past year, leading to a series of famous events in which most traders lost their money while insiders were making profits. With Libra tokens alone, some estimates have led to public losses of $4.4 billion. Unlike previous crypto cycles where wide market growth rewarded holders, Memecoin’s speculation today created an environment where the average trader’s chances of success are small. How did Memecoins drive the market to a dead end?

Speculation or investment?

Investment and speculation are fundamentally different games with clear rules. Investing is not about making money quickly. It is about purchasing the right assets to protect capital over the long term. Investors usually don’t wait for a proper “entry point,” but they buy to buy assets for years. Such assets grow compared to Fiat currency based on basic factors. For example, stocks, gold and Bitcoin (BTC) rise against the US dollar, which faces unlimited issuance and inflation.

Some assets have additional growth drivers, including increased demand for property, increased profits for businesses, and even the government’s adoption of Bitcoin, which are bonuses. The key is that your investment is not going to lose all the value to Fiat. Investors follow long-term macroeconomic trends. This helps you maintain your purchasing power.

Speculation, on the other hand, is a zero-sum game, with skilled minorities benefiting from an uninformed majority. Usually, such people are chasing quick profits. This is what happens with memokine. Unlike traditional investments, they lack intrinsic value, dividends, or interest benefits. In the case of Bitcoin, the “great fool” who buys after a trader could become a company that adopts the Bitcoin standard, and the whole country that will then establish strategic Bitcoin reserves after the US, and in the case of tokens like Libra, Greater Fool is the person who bought it after the announcement of Javier Milei.

Unregulated gambling

MemeCoins works just like an online casino. They provide entertainment and promise quick profits, but only support those who create and promote them. Unlike regulatory gambling, where risk is well known, Mimecoin is often exaggerated by influential figures and, as a result, social media narratives, starting with the well-known crypto influencer Murad and from the end with the US president. The harsh reality is that, like casinos, the odds are overwhelmingly in favor of insiders and early adopters, the majority are losing money.

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Memecoin clearly thrives with speculation and psychological triggers. This is a game that evolves emotions and emptys the player’s wallet. Platforms like Pump.Fun, which drive the launch of Memecoin, enjoy a ton of benefits and prove that selling shovels is the best way to profit from the Gold Rush. How do I need a license to open a casino and choose a location in a strictly designated area?

Well, things could change soon.

Will this end?

The lack of regulatory oversight has enabled the explosive growth of memokine. How did you get here? Let’s recall recent SEC activities, namely lawsuits against major distributed fiscal (DEFI) protocols and large crypto companies that have attempted to fair. Another serious step was the Chokepoint 2.0 operation directed by the previous US administration against the crypto industry as a whole. All this not only thwarted the intentional companies that created something meaningful in cryptography, but also indirectly caused counterweights in the form of other players who used unclear rules.

As a result, Crypto Exchange has recently listed Mecoins primarily soon after its release. Chaos in the field of regulation has transformed the crypto industry into a rather global casino. Previously, everyone wanted to win this gamble, but now, with losses, the general disappointment seems to have stopped.

There is a series of hope. The current US administration could be clearly referred to as “crypto-friendly.” This means there could be a significant progress in regulations this year. This is especially important for the Defi sector, which has long discovered fits in the product market, is rapidly developing and has acquired a market for traditional financial (banks, brokers, and other intermediaries).

It is essential to rewrite outdated financial regulations as quickly as possible. The old rules are designed for systems based on the trust of central brokers, but the new framework requires that smart contracts, or viable blockchain code, beneficial.

A stronger regulatory framework could introduce strict requirements for token launches, such as mandatory disclosures of creators’ personality and restrictions on centralized exchange listings.

However, market participants may learn through costly mistakes without direct intervention and may be more cautious about Memecoin investments. After a series of harsh yet sobering memos, coin lag pulls, the Web3 community will ultimately realize that such projects rarely reward risk takers. If someone still decides to take the chance, they should treat it like a trip to the casino. It brings the amount they are ready to lose and simply makes the most of the joy from this experience.

For those who don’t appeal to this approach, or who are serious about increasing their net worth and passing it on to future generations, we’ll be back to the real world of bland Bitcoin purchases. The market seems to be starting to make this happen now.

Opinion: Georgii verbitskii, founder of Timio.

This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.