‘Every penny is a carpet pull in the job’ – Mark Cuban
Investor Mark Cuban recently appeared on the Rogue Radio podcast to share his thoughts on the crypto industry, including his belief that all memecoins are a dumbed-down rug-puller with no real-world utility.
“It's like playing roulette,” Cuban told the interviewer, describing the meme business as a game of “musical chairs” where all participants play. The long-term investor explained that while memecoins may exhibit strong communities, they lack staying power:
“Every single meme pool is pulling a rug in the works, right? Because there's no reason to post it except for the fun of it, and so many people come in to see the value of the token increase – it's musical. Chairs.”
Cuban also explained that the memecoin markets are fundamentally underpinned by the Great Fool's Theory – a market hypothesis that asserts that investors can buy an asset independent of the fundamentals and still sell the asset to another investor.
The investor who buys the overvalued property can repeat the process by finding another individual – who will pay more for the property – similarly offloading the property to someone willing to pay a premium.
“No one is stupid enough to think this is a great investment,” Cuban said of memecoins, admitting that he sometimes thinks about trading memecoins, but always refrains from giving in to the temptation.
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2024 will be the year of memecoin.
381,401 new memecoins have been created on the Solana network in the last 30 days. Most of these tokens lose 99% of their value within a few days or so of being traded. The most obvious of these pump and dump methods is from celebrity memes, which has generated widespread criticism from businessmen and industry experts.
Memecoins have been created on Solana in the last 30 days. Source: Step Finance
Still, several memecoin projects have stood the test of time and secured their place as blue chip meme projects.
In the week of September 27, Pepe memecoin (PEPE) gained 30% in value, due to the increase in meme trading. DogwhipHat (YF) — one of the only memecoins measured in total dollar terms — similarly posted huge gains in September. However, markets erased those gains in the first week of October.
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