The cryptocurrency world is divided over the merits of meme coins, digital tokens inspired by internet jokes and pop culture references. Proponents hail them as an opportunity for explosive profits, while established figures such as bitcoin evangelist Adam Back deride them as a fad.
A risky ride on the advertising train
Meme coins have taken the cryptocurrency market by storm in recent months. Tokens like Pepe and Dogwifhat They have seen a sudden surge in value, fueled by online communities and celebrity endorsements. The promotion of the meme coin itself by influencer Iggy Azalea exemplifies this trend.
Analyst Murad Mahmudov sees potential in this space, but warns against highly speculative microcaps. crypto-basics/what-is-a-memecoin” target=”_blank” rel=”noopener nofollow”>meme coins – Basically, small startups in the cryptocurrency world.
This speculative frenzy is not without its critics. ethereum co-founder Vitalik Buterin echoes Back's concerns, arguing that manyethereum-co-founder-vitalik-buterin-183015645.html” target=”_blank” rel=”noopener nofollow”> Meme coins lack real-world applications or innovative technology. It questions its long-term viability.
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Reminder, zoom out. Previous bull runs also had half a dozen -30% drops. We are at about -26% (-27% before).
In fact, if anything, the recent declines seem to be shallower, but people forget the normal bull market pattern. Don't panic, buy the dip, or buy a little bit of the stock. twitter.com/search?q=%24CMSTR&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>$CMSTR
— Adam Back (@adam3us) twitter.com/adam3us/status/1809102254512775659?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>July 5, 2024
Back, mentioned in the original bitcoin whitepaper, has a history of dismissing meme coins with his characteristic bluntness. In 2021, he took aim at both meme creators and their creations.
He counterattacked the call “shitty purses” saying that they are terrible at making memes and the reason for that is unclear.
The co-founder of blockchain technology firm Blockstream further dampened the hype around expensive meme-based nfts like EtherRock, which sold for millions despite being, in his words, “a low-res gif that has no merit.”
Is bitcoin the only “investment grade” cryptocurrency?
Back's stance is clear: bitcoin is the only cryptocurrency with real investment potential. He is wary of meme coins and most alternative cryptocurrencies (altcoins).
This unwavering support for bitcoin is not new. Back has repeatedly called bitcoin “super cheap,” even when its price was hovering around $66,720 in April of this year.
Back believes the market is underestimating bitcoin’s potential as a digital store of value, similar to gold. He further argues that some bear markets, such as the recent price drops that led bitcoin to plummet to a five-month low, are necessary for investors to truly understand bitcoin’s long-term value proposition.
A battle of memes and fundamentals
The clash between meme coins and established cryptocurrencies like bitcoin reflects a deeper debate about the future of digital assets. Meme coins represent a bid for cultural relevance and community power.
Its success depends on maintaining enthusiasm and attracting new investors. bitcoin, on the other hand, relies on its established technology and growing adoption as a legitimate financial instrument.
Featured image from WSJ, chart from TradingView
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