Opinion: George Verbitskii, founder of Tymio

Memecoins dominated the narrative of cryptocurrencies over the past year, which leads to a series of high -profile events in which most traders lost money while profits of profits. The Libra token itself, according to some estimates, reached $ 4.4 billion in public losses. In contrast to previous cryptocurrency cycles, in which owners of the award -winning on the market, today’s Memecoin speculations have created an environment in which the chances of the success of an average salesman are tiny. How did Memecoins come to the market to the blind alley and will it ever end?

Speculation or investment?

Investing and speculation are essentially different games with separate rules. Investing is not about earning rapid money. It is about buying appropriate assets to protect capital in the long run. Usually, investors are not waiting for the right “entry point”, but buy assets for years. Such assets grow in relation to Fiat currencies based on basic factors. For example, actions, gold and bitcoins (BTC) grow in relation to the American dollar, which is in the face of unlimited emissions and inflation.

Some assets have additional growth factors – growing real estate demand, growing company profits, and even the acceptance of bitcoins by governments – but these are bonuses. The key issue is that your investment should not lose all its value in relation to Fiat. Investors observe long -term macroeconomic trends that assist them maintain purchasing power.

On the other hand, speculation is a game of zero sum, in which a qualified minority gains due to an under -informed majority. Usually such people are chasing rapid profits. This is happening with Memecoins. Unlike established investments, they lack internal value, dividends or refunds. While in the case of Bitcoin, “larger fools” who buy for traders, there may be companies taking Bitcoin, and then entire nations establishing strategic bitcoin reserves after the USA, in the case of a token such as Libra, the one who bought it after the announcement of Javier Milei na X. This is no more buyers.

Unregulated gambling

Memecoins work similarly to online casinos. They provide entertainment and promise quick profits, but they only favor those who create and promote them. In contrast to the regulated gambling, in which the risk is known, memecoins are often excited about influential forms-devoting from the celebrated influential cryptographic Murad and ending from the President of the US-therefore narrative in social media. The hard reality lies in the fact that, like in the casino, the most vital opportunities were favored by outsiders and early users, while most are suffering.

Last: Solana’s token Minting Frenzy loses a couple when memecoins are set on fire

Memcoin’s madness clearly develops on speculation and psychological triggers – it is a game that evolves emotions and leaves empty player wallets. Platforms such as Pump.Fun, which facilitate the premieres of Memecoin, have brought huge profits, proving that the sale of shoulder blades is the best way to get profits from gold fever. How can the opening of the casino require a license and choice of location in strictly designated areas, while everyone can start their own memecoin?

Well, the situation will probably change soon.

Will it ever end?

Lack of regulatory supervision enabled the rapid development of Memecoin. How did we get here? Let’s remember about SEC in recent years, namely lawsuits against the main decentralized financial protocols (DEFI) and immense cryptographic companies that tried to play fair. The next earnest step was the DhoKepint 2.0 operation, directed by the previous US administration against the cryptographic industry as a whole. All this not only muffled companies that created something significant in cryptography, but also indirectly, caused a counterweight in the form of other players who benefited from unclear rules.

As a result, the cryptographic exchanges have recently been mentioned mainly by Memecoins almost immediately after their release. Chaos in the field of regulation changed the cryptographic industry into a immense global casino. While everyone previously hoped to win in this gambling, now, along with the losses, it seems that there is a general disappointment.

There is a ray of hope. The current US administration can be clearly called “friendly cryptocurrency”, which means that we will probably see significant progress of regulation this year. This is particularly key to the DEFI sector, which has long been considered to be the product market matching and develops quickly, capturing the markets of established finances (banks, brokers and other brokers).

It is necessary to prescribe old-fashioned financial regulations as soon as possible. Elderly rules have been designed for a system based on trust in centralized intermediaries, while the recent framework must contain clever contracts – in other words, the code of executable blockchain.

Stronger regulatory frames can introduce more severe requirements for launching tokens, including mandatory disclosure of creators’ personality and restrictions on centralized exchange offers.

However, market participants can learn through exorbitant errors even without direct intervention and become more cautious about the Memecoin investment. After a series of piercing, but sobering memecoin rugs, the Web3 community should finally realize that such projects rarely reward the risk. If someone still decides to take a risk, they should treat it like a trip to the casino: only bringing the amount they are ready to lose and how to best employ the joy of this experience.

For those to whom this approach does not speak, or really seriously in terms of increasing its net value to convey it to future generations, welcome to the real world of niedy, regular Bitcoin purchases. It seems that the market is only starting to be aware of now.

Opinion: George Verbitskii, founder of Tymio.

This article is used for general information purposes and should not be and should not be treated as legal or investment advice. The views, thoughts and opinions expressed here are themselves and do not necessarily reflect or represent the views and opinions of Cointelegraph.