Because the official memecoin of the second Donald Trump presidency flirts with a market cap of $10 billion, and Melania Trump, the following first girl, launches her personal, Balaji Srinivasan, the previous CTO of Coinbase, mentioned in a thread on X that this complete class of tokens may very well be equated to playing.
A memecoin is a zero-sum* lottery.
There isn’t a wealth creation. Each purchase order is just matched by a promote order. And after an preliminary spike, the value finally crashes and the final patrons lose all the pieces.
* It’s really adverse sum if the platform takes a lower.
— Balaji (@balajis) January 19, 2025
“There isn’t a wealth creation. Each purchase order is just matched by a promote order. And after an preliminary spike, the value finally crashes and the final patrons lose all the pieces,” he posted, calling memecoins a zero-sum – even adverse sum after trade charges – lottery.
Balaji mentioned that memecoins needs to be approached in the identical manner as playing in Las Vegas for leisure functions.
“Most can buy property that retain their worth over the long term,” he continued. “It’s generally doable so as to add use circumstances to a memecoin, or to maintain it within the headlines to maintain its worth aloft indefinitely. And we’ve seen examples of that as nicely.”
In response to the publish, many requested Balaji if bitcoin was ever thought of a memecoin, to which he argued that it wasn’t due to its use circumstances and decade-plus endurance.
You might be free to contemplate any asset a memecoin, and I’m not offended by that, however I’m glad to clarify why I believe Bitcoin is totally different.
1) Bitcoin is the bottom layer asset of a blockchain with ~800 Th/s in hashrate throughout a whole lot of datacenters worldwide.
2) It hasn’t been… https://t.co/tazGAzGnjn pic.twitter.com/58AZxtsy9a
— Balaji (@balajis) January 19, 2025
“Bitcoin is the bottom layer asset of a blockchain with ~800 Th/s in hashrate throughout a whole lot of datacenters worldwide,” he wrote. “It grew step by step over time, somewhat than unexpectedly, and the mining issuance schedule limits how a lot may be bought by anybody celebration.”
Market curiosity within the official Trump memecoin has sucked liquidity out of different memecoins, with CoinGecko knowledge reporting that the class has shrunk by 8% within the final 24 hours. Most of the high memecoins like DOGE, SHIB, and BONK are down by over 10% on-day.
READ MORE: Bitcoin retraces to $100K, TRUMP Tanks 30% as Melania Memecoin Skyrockets
