Ahead of the United States presidential inauguration, the Trumps decided to launch so-called memecoins. They’re eponymous, called $TRUMP and $MELANIA.
What are memecoins, you ask? It’s actually quite hard to explain to anyone looking for a rational reason for their existence. If you think of memecoins as fully speculative crypto currency tokens without any intrinsic value, often created as stupid Internet jokes, and which are completely unsafe to dabble in, you’d be on the right track.
There are heaps of memecoins, many of which have gone boom to bust and seen their operators “rug pull”. No particular technical ability is required, since you can use memecoin generation sites for a fee.
The entire phenomenon is well-publicised, nothing new, warnings abound yet people still pile in on memecoins.
As of writing, on Binance-owned CoinMarketCap, one $TRUMP unit can be exchanged for US$39.19. That rate is ticking downwards by the minute, with the high yesterday being US$75.45. Some say this is because of $MELANIA which was launched after $TRUMP.
The $MELANIA memecoin exchange rate is US$5.29, down 61.17 per cent from Monday’s high. Don’t take any of those figures at face value, ditto the claims of billions of dollars in “market capitalisation” because it’s all speculation and misleading metrics.
Oh, and outright fraud like “wash trading” between operator controlled accounts that makes some cryptocurrencies seem more popular than they are.
There are recurring stories these days about crypto currency exchanges getting hacked or otherwise emptied; millions of dollars, billions even, supposedly go missing, yet the financial system doesn’t keel over and sink. How is that possible?
It’s not. Long story short, memecoins have not magically created billions of dollars in value.
Read Molly White’s excellent and detailed explanation on fundamentally flawed crypto valuations, which is why “crypto billionaires” aren’t that.
Which is not to say that what is happening isn’t completely extraordinary. That the incoming United States president is doing this is like an episode of the dystopian TV series Black Mirror in real life, one that few if any could imagine.
We should not legitimise it. As White says: “more than anything, journalists should question everything in an industry where there is always an incentive to promote, inflate, and exaggerate.”
It’s going to be a very long four years, and the circus has only just started.
56 Comments
Thanks for linking that article from Molly White.
Molly is intelligent and passionate, as well as being a good writer. But her knowledge and understanding can be quite poor. Her biases pepper her well-sounding and well-intentioned articles and polemics.
For ex, one of her themes is that 'crypto is valued in dollars'. This is not necessarily true and depends on the person. For example, platforms like TradingView show numerous crosses such as BTC/ETH for the obvious reasons. Many OGs will already instinctively have mental price anchors to BTC. I know that I do. Because if you're a long-term holder of BTC with exposure to sh*tcoins, then it makes complete sense to have the right valuation framework for understanding. For similar reasons, people might look at the SPX performance since 2000 in gold terms, not just USD terms.
Here is some data fro you JC..(alas XRP not mentioned)
Solana broke all previous blockchain records over the weekend.
It achieved nearly $30 billion in DEX volumes and a weekly total of $89 billion.
This represents a 60-fold increase compared to volumes during the bear market.
OK. You understand the trade offs, right? I have nothing against SOL and what it's attempting to do, but I'm also realistic and don't get married to this stuff. In some ways, that's why I find the recent rise of XRP quite fascinating as it was written off as dead and buried, and not just because of the Biden admin and its puppets trying to crush it.
As for SOL as a speculative instrument, it's been superb. No doubt about that. That it was promoted by SBF and FTX spooked me somewhat as I feared it could be a nefarious scam in some respects. And all power to those who have made out like bandits on it.
If everything is now legal, many startups will try raising funds by issuing tokens as explicit cryptoequity.
As context, the SEC distorted the market for the last decade by forcing founders to obscure the obvious analogy between tokens and equity. But there is nothing *morally* wrong with moving equity from spreadsheets and NASDAQs to blockchains.
Indeed, from a *technical* perspective it’s far better to represent equities onchain. You can hold them in a wallet, price them with an API call, and track them on an explorer. You can also easily issue dividends, execute buybacks, and manage vesting schedules.
And from a *financial* perspective, there is no contest between the global market of crypto investors and the local market of any given city.
But that shouldn’t mean short-term behavior. Founders can (and should) implement lockups, drag along, cosale rights, and the like. All these conventions align long-term interests of investors and founders.
You could get there by using AI to translate a typical Series A package into a set of smart contracts. And exchanges should step up to help retail by clearly identifying assets that implement long-term, value-aligning lockups.
At least, that’s the responsible game plan for using new technology to fund actual companies. I hope we use our powers responsibly, and will fund projects in this space as we gain more legal clarity.
But we may *finally* enter the long-overdue age of the cryptoequity. And a risk-tolerant community will surge into that space to explore what’s possible. This is one of the downsides of regulating by enforcement. All the SEC did was shoot at good people rather than make good rules. Perhaps the moment was simply beyond their capabilities, and the regulation will de facto fall to the crypto exchanges. In other words: we don’t yet have rule-of-law. All we have is rule-of-code. And that may be how it lands up.
- Balaji S. Srinivasan, prominent American entrepreneur, angel investor, and technology executive, particularly recognized for his significant contributions to the fields of cryptocurrency and genomics.
We're still in the unregulated "ripoff" phase
Not sure you understand Dr Y. The Bidean admin through the SEC has a pretty limited track record against "ripoffs". Their main focus has been on projects that have legitimacy in terms of innovation. Such as the case against Ripple.
Just because you don't understand something doesn't make it a ripoff.
"They are all the same thing."
No, they are NOT.
Some, like Bitcoin, are rare & limited, hard to cheat with, but devour electricity and are destroying our environment. It's based on a concept called "proof of work", i.e. huge quantities of electricity have been consumed to create each coin and/or check if it is valid.
Others use a "proof of stake" concept. This uses far, far less electricity. And is where I believe the future will be. But, there's a lot of work required to make "proof of stake" rock solid (albeit salesmen for such coins will disagree with me.)
And then there's junk ... Like the $Trump and $Meliania stuff ... that'll be worthless in no time.
Most people want markets that are predictable and are protected by the ruling elite. That is why property Ponzis and equity markets are so popular. They can be controlled by adjusting the price of money and / or money supply. But nobody questions the status quo nor do they understand (or accept) the trade offs.
Critical Metals Corp (Nasdaq: CRML) is a mining exploration and development company headquartered in NYC focused on the extraction of critical metals and minerals essential for the green energy transition in Europe. The company primarily targets lithium and rare earth element deposits, with significant projects in Austria and Greenland.
The company disclosed y'day that it is making BTC its primary treasury reserve asset. They already have access to $100mm to buy bitcoin and could acquire up to $400mm more via a convertible debt raise.
https://csimarket.com/news/critical-metals-corp-pioneers-new-frontier-e…
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