Because the official memecoin of the second Donald Trump presidency flirts with a market cap of $10 billion, and Melania Trump, the subsequent first woman, launches her personal, Balaji Srinivasan, the previous CTO of Coinbase, stated in a thread on X that this entire class of tokens may very well be equated to playing.
A memecoin is a zero-sum* lottery.
There is no such thing as 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 every part.
* It’s really destructive sum if the platform takes a lower.
— Balaji (@balajis) January 19, 2025
“There is no wealth creation. Every buy order is simply matched by a sell order. And after an initial spike, the price eventually crashes and the last buyers lose everything,” he posted, calling memecoins a zero-sum – even destructive sum after alternate charges – lottery.
Balaji stated that memecoins needs to be approached in the identical means as playing in Las Vegas for leisure functions.
“Most should buy assets that retain their value over the long run,” he continued. “It is sometimes possible to add use cases to a memecoin, or to keep it in the headlines to keep its value aloft indefinitely. And we’ve seen examples of that as well.”
In response to the put up, many requested Balaji if bitcoin was ever thought-about a memecoin, to which he argued that it wasn’t due to its use instances and decade-plus endurance.
You’re free to contemplate any asset a memecoin, and I’m not offended by that, however I’m glad to clarify why I feel Bitcoin is totally different.
1) Bitcoin is the bottom layer asset of a blockchain with ~800 Th/s in hashrate throughout a whole bunch of datacenters worldwide.
2) It hasn’t been… pic.twitter.com/58AZxtsy9a
— Balaji (@balajis) January 19, 2025
“Bitcoin is the base layer asset of a blockchain with ~800 Th/s in hashrate across hundreds of datacenters worldwide,” he wrote. “It grew gradually over time, rather than all at once, and the mining issuance schedule limits how much can be sold by any one party.”
Market curiosity within the official Trump memecoin has sucked liquidity out of different memecoins, with CoinGecko information reporting that the class has shrunk by 8% within the final 24 hours. Most of the prime 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
