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The crypto industry has turned into a global memecoin casino

Opinion by: Georgii Verbitskii, founder of TYMIO 

Memecoins have dominated the crypto narrative over the past year, leading to a series of high-profile events where most traders lost money while insiders profited. The Libra token alone, by some estimations, resulted in $4.4 billion in public losses. Unlike previous crypto cycles where broad market growth rewarded holders, today’s memecoin speculation has created an environment where the average trader’s chances of success are slim. How did memecoins happen to drive the market to a dead end, and will this ever end?

Speculation or investment?

Investing and speculation are fundamentally different games with distinct rules. Investing isn’t about making quick money. It is about purchasing the right assets to protect capital in the long haul. Usually, investors don’t wait for the right “entry point” but purchase assets to be held for years. Such assets grow relative to fiat currencies based on fundamental factors. For example, stocks, gold and Bitcoin (BTC) rise against the US dollar, which faces unlimited issuance and inflation.

Some assets have extra growth drivers — rising property demand, growing company profits or even Bitcoin adoption by governments — but these are bonuses. The key point is that your investment is not supposed to lose all its value against the fiat. Investors follow long-term macroeconomic trends, which helps them preserve purchasing power.

On the other hand, speculation is a zero-sum game where the skilled minority profits because of the uninformed majority. Typically, such people are chasing quick profits. This is what happens with memecoins. Unlike traditional investments, they lack intrinsic value, dividends or interest returns. While in the case of Bitcoin, the “greater fools” who buy after a trader could be companies adopting the Bitcoin standard, followed by entire nations establishing strategic Bitcoin reserves after the US, in the case of a token like LIBRA, the greater fool is the one who bought it after Javier Milei’s announcement on X. That’s it — there are no more buyers.

Unregulated gambling

Memecoins operate similarly to online casinos. They provide entertainment and promise quick profits but favor only those who create and promote them. Unlike regulated gambling, where risks are well-known, memecoins are often hyped by influential figures — starting from the famous crypto influencer Murad and ending with the US president — and, consequently, social media narratives. The harsh reality is that, like in a casino, the odds overwhelmingly favor insiders and early adopters while the majority suffer losses.

Recent: Solana’s token minting frenzy loses steam as memecoins get torched

The memecoin craze clearly thrives on speculation and psychological triggers — this is the game that evolves emotions and leaves players’ wallets empty. Platforms like Pump.fun, which facilitate memecoin launches, have reaped massive profits, proving that selling shovels is the best way to profit from a gold rush. How can opening a casino require a license and choosing a location in strictly designated areas, while anyone can launch their own memecoin? 

Well, the situation is likely to change soon.

Will this ever end?

The lack of regulatory oversight has enabled the explosive growth of memecoins. How did we get here? Let’s remember the SEC’s activities in recent years, namely lawsuits against major decentralized finance (DeFi) protocols and large crypto companies that tried to play fair. Another serious step was Operation Chokepoint 2.0, directed by the previous US administration against the crypto industry as a whole. All this not only stifled well-intentioned companies that created something meaningful in crypto but also indirectly triggered a counterweight in the form of other players who took advantage of unclear rules.

As a result, crypto exchanges have recently been listing mostly memecoins almost immediately after their release. Chaos in the field of regulation has turned the crypto industry into a sizable global casino. While earlier, everyone hoped to win in this gamble, now, along with the losses, it seems that general disappointment is setting in.

There is a ray of hope. The current US administration can unequivocally be called “crypto-friendly,” which means we will likely see significant regulation progress this year. This is especially crucial for the DeFi sector, which has long found its product-market fit and is rapidly developing, capturing the markets of traditional finance (banks, brokers and other intermediaries).

It is essential to rewrite outdated financial regulations as quickly as possible. The old rules were designed for a system based on trust in centralized intermediaries, whereas the new framework must incorporate smart contracts — in other words, executable blockchain code.

Stronger regulatory frameworks could introduce stricter requirements for token launches, including mandatory disclosures of creators’ personalities and restrictions on centralized exchange listings. 

Yet market participants may learn through costly mistakes even without direct intervention and become more cautious about memecoin investments. After a series of harsh but sobering memecoin rug pulls, the Web3 community should finally realize that such projects rarely reward risk-takers. If someone still decides to take a chance, they should treat it like a trip to the casino: only bringing the amount they are prepared to lose and making the most of the joy from this experience. 

For those to whom this approach doesn’t appeal or those truly serious about growing their net worth to pass it on to future generations, welcome to the real world of bland, regular Bitcoin purchases. It seems the market is only now starting to realize this.

Opinion by: Georgii Verbitskii, founder of TYMIO.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Why Boris’s best mate is off to Reform

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Why Boris's best mate is off to Reform

👉Listen to Politics at Sam and Anne’s on your podcast app👈       

Former Conservative chairman and friend of Boris Johnson – Sir Jake Berry – is defecting to Reform UK, causing more problems for Tory leader Kemi Badenoch.

On today’s episode, Sky News’ Sam Coates and Politico’s Anne McElvoy discuss if his defection will divide parts of Reform policy.

Elsewhere, the Anglo-French summit gets under way, with Prime Minister Sir Keir Starmer hoping to announce a migration deal with French President Emmanuel Macron to deter small boat crossings.

Plus, chatter around Whitehall that No10 are considering a pre-summer reshuffle, but will it have any value?

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Australia to test CBDCs, stablecoins in next stage of crypto play

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Australia to test CBDCs, stablecoins in next stage of crypto play

Australia to test CBDCs, stablecoins in next stage of crypto play

The trial is part of Project Acacia, an initiative from the RBA exploring how digital money and tokenization could support financial markets in Australia.

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Ex-Tory chairman Sir Jake Berry defects to Reform

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Ex-Tory chairman Sir Jake Berry defects to Reform

Ex-Tory chairman Sir Jake Berry has defected to Reform, in the latest blow to the Conservatives.

The former MP for Rossendale and Darwen, who served as Northern Powerhouse minister under Boris Johnson and lost his seat last year, said he had defected to Nigel Farage’s party because the Tories had “lost their way”.

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Reform UK confirmed the defection to Sky News, which was first broken by The Sun.

Speaking to the paper, Sir Jake said Mr Farage’s party was the “last chance to pull Britain back from terminal decline”.

“Our streets are completely lawless,” he said.

“Migration is out of control. Taxes are going through the roof.

More on Reform Uk

“And day after day, I hear from people in my community and beyond who say the same thing: ‘This isn’t the Britain I grew up in’.”

Sir Jake accused his former party of “abandoning the British people” but said he was not “giving up”.

“I’m staying. And I’m fighting.

“Fighting for the Britain I want my kids, and one day, my grandkids, to grow up in.”

Mr Farage welcomed what he said was “a very brave decision” by Sir Jake.

“His admission that the Conservative government he was part of broke the country is unprecedented and principled,” he added.

A Conservative Party spokesman said: “Reform support increasing the benefits bill by removing the two-child cap, and nationalising British industry. By contrast the Conservatives, under new leadership, will keep making the case for sound money, lower taxes and bringing the welfare bill under control.

“We wish Jake well in his new high spend, high tax party.”

Sir Jake’s defection to Reform comes just days after former Conservative cabinet minister David Jones joined Reform UK, which continues to lead in the polls.

European Research Group (ERG) chair Mark Francois (left), and deputy chair David Jones, speak to the media outside Portcullis House, Westminster
Image:
Former Welsh secretary David Jones (R) alongside Tory MP Mark Francois. Pic: PA

Mr Jones, who was MP for Clwyd West from 2005 until standing down in 2024, said he had quit the Tories after “more than 50 years of continuous membership”.

Sir Jake was the MP Rossendale and Darwen in Lancashire between 2010 and 2024, when he was defeated by Labour’s Andy MacNae.

He held several ministerial posts including in the Department for Housing, Communities and Local Government, Energy and Climate Change and the Cabinet Office.

Nigel Farage holds up six fingers to indicate the six votes his party's candidate won by in the Runcorn and Helsby by-election.
Pic: Reuters
Image:
Nigel Farage after winning the Runcorn and Helsby by-election.
Pic: Reuters

He was also chairman of the Conservative Party from September to October 2022, under Liz Truss.

Announcing his defection – which comes a year after the Tories suffered their worst ever election defeat – Sir Jake said “Britain was broken” and “the Conservative governments I was part of share the blame”.

“We now have a tax system that punishes hard work and ambition,” he said.

“Just this week, we saw record numbers of our brightest and best people leaving Britain because they can’t see a future here. At the same time, our benefits system is pulling in the world’s poor with no plan for integration and no control over who comes in.

“If you were deliberately trying to wreck the country, you’d be hard-pressed to do a better job than the last two decades of Labour and Tory rule.

“Millions of people, just like me, want a country they can be proud of again. The only way we get that is with Reform in government. That’s why I’ve resigned from the Conservative Party. I’m now backing Reform UK and working to make them the next party of government.”

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He added: “And with Nigel Farage leading Reform, we’ve got someone the country can actually trust. He doesn’t change his views to fit the mood of the day. And people respect that. So do I. That’s why I believe he should be our next prime minister.”

A Labour Party spokesperson said: “Not content with taking advice from Liz Truss, Nigel Farage has now tempted her Tory Party chairman into his ranks.

“It’s clear Farage wants Liz Truss’s reckless economics, which crashed our economy and sent mortgages spiralling, to be Reform’s blueprint for Britain. It’s a recipe for disaster and working people would be left paying the price.”

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