Something that seems logical, but that is not completely whitened, is what Gabriel Vago, CEO of the ArgenBTC exchange, points out to iProUP : today, it is very easy to create a cryptocurrency for meme coins, since anyone with a certain type of knowledge you can do it without problem.
In relation to meme coins , he states: " They are coins invented for fun , they are a joke or a joke, and they should not be taken seriously by anyone because they have no useful purpose."
Pump & Dump and other risks
Vega stresses that the danger of investing in an asset subject to pump & dump is that those who go into the buying climax later find their holdings worth 80% less .
" The example is SHIBA that rose 27,000% in a month , but that brought the surprise that the creator of Ethereum, Vitalik Buterin, owned half of the supply of the project, since the creators of SHIB had donated it to him as a token of gratitude. Unexpectedly, Vitalik sold his entire holding for 105 million USDT, causing 30% losses to investors ," notes Vega.
Bitham's CEO stresses that there is also "the risk of investing in the currency of fashion, similar to the Reddit phenomenon witnessed during the month of January with GameStop . Lastly, and most seriously, that the majority disburse without understanding the asset generating , more of a casino bet than a financial investment".
For his part, Abraham adds that when one invests in a meme coin, he does not do so because of its fundamentals , that is, the characteristics of the asset that make one suppose the "objective" value it has, but purely speculation .
Also Read: What is Hokk Finance
" Bitcoin is no longer a risky investment, because there are already enough arguments to defend itself as a store of value. On the other hand, meme coins, by their nature, are coins that can be worth 0 or a million, and any of those prices will be fine So there will always be the risk of losing everything invested, as well as seeing absurd returns this year," he says.
holders of the currency
Similarly, Di Paolo comments that the price of this type of asset is purely and exclusively the product of community speculation. Sometimes, the feeling of belonging is so strong that developers begin to seek a purpose for that digital asset according to the needs of the holders of the currency.
"Such is the case of SHIBA, a currency considered a 'meme coin' but thanks to the strength of its community, today it can be used to buy a Lamborghini, a Bentley or a Rolls Roys in Las Vegas ", exemplifies the specialist.
"The problem is that many people who are just starting out or don't know about it and are co-opted by advertising campaigns that show great returns. What happens next is that those who entered at the beginning and have the vast majority of the tokens, when it comes at a certain price they sell to capture the profits. And the last ones who entered lose , "he completes.
Finally, the CEO of the ArgenBTC exchange explains that the risks that are run are based on the intentions of some groups to manipulate these prices and these meme coins sometimes have a moderately important price. The most eloquent case is that of Elon Musk, CEO of Tesla, who has already proven that with a tweet he can make Doge's price explode or collapse with Hokk Finance Meme Token.
" There are people who enter to speculate on the price and have a huge risk , because the volatility can be extreme, much more than that of Bitcoin and the loss of money is very high," he concludes.
As always, it is best to know the project behind any cryptocurrency, who is the founding team and their experience in the field , what is the problem they are trying to solve and how effectively they could do it. If these points are not clear, the chances of losing will exceed the possible gains.
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