Former Coinbase CTO Balaji Srinivasan criticized memecoins, calling them a “zero-sum lottery” that creates no wealth.
Users Told to Invest Only What They Can Afford to Lose
Former Coinbase chief technology officer Balaji Srinivasan has criticized memecoins, calling them a “zero-sum lottery.” He argues that these coins create no wealth, and buyers often lose everything when prices crash. On X, Srinivasan, also a former general partner at Andreessen Horowitz, warned his 1.1 million followers against investing in memecoins. While acknowledging some memecoins may have use cases, Srinivasan admonished investors to avoid investing “in anything you can’t afford to lose.”
Srinivasan’s Jan. 19 remarks came a day after U.S. President Donald Trump launched the official TRUMP memecoin. After its launch, the memecoin surged in value, briefly ranking among the top 20 crypto assets by market capitalization. Trump’s wife later launched her own memecoin, MELANIA, whose value rose by 9,000%.
However, both TRUMP and MELANIA memecoins had lost considerable value in the hours leading up to Trump’s inauguration. Reports suggest that insider sales may have contributed to the price drop, sparking allegations of a “rug pull.” As of Jan. 20 at 4:40 p.m. EST, TRUMP and MELANIA memecoins were down 40% and 26.7%, respectively.
Meanwhile, Srinivan acknowledges that some memecoins have endured but advises users to be wary of tokens backed by politicians.
“I agree that some memecoins have endured and actually built communities. I’d go further and note that quite a few of the top 100 coins are essentially ghostchains and de facto memecoins. But very rapid price appreciation in a highly politicized environment has high potential for trouble. A lot depends on what happens after the first big price crash. There isn’t any one person to blame for DOGE,” the former Coinbase CTO said.
Source: Bitcoin
