Has the Crypto Assets industry become a global meme coin casino?

The speculative behavior surrounding meme coins today has created an environment where the chances of success for ordinary traders are extremely slim.

Written by: GEORGII VERBITSKII, Cointelegraph

Compiled by: BitpushNews

In the past year, meme coins have dominated the narrative in the cryptocurrency space, triggering a series of high-profile events. In these events, most traders suffered losses while insiders profited. Just the Libra token alone is estimated to have caused public losses of $4.4 billion. Unlike the widespread market growth in previous cryptocurrency cycles that rewarded holders, today's meme coin speculation has created an environment where the chances of success for ordinary traders are minimal. How did meme coins drive the market into a dead end? Will this situation come to an end?

Investment or Speculation?

Investing and speculating are essentially two completely different games, each with its own set of rules. Investing is not about making quick money, but rather about purchasing the right assets to protect capital over the long term. Typically, investors do not wait for so-called "entry points" but instead buy assets that can be held for the long term. These assets appreciate in value relative to fiat currencies based on fundamental factors. For example, stocks, gold, and bitcoin are all appreciating in value relative to the dollar, which faces unlimited issuance and inflation.

Some assets also have additional growth momentum, such as the increasing demand for real estate, rising corporate profits, and even government adoption of Bitcoin, but these are all extra bonuses. The key is that your investments should not lose value relative to fiat currency. Investors follow long-term macroeconomic trends, which helps them maintain purchasing power.

Speculation, on the other hand, is a zero-sum game in which the few skilled people profit because of the ignorance of the majority. Usually, these people are chasing quick profits. This is what happens with meme coins. Unlike traditional investments, meme coins lack intrinsic value, dividends, or interest returns. In the case of Bitcoin, when a trader sells, the "bigger fool" may be the company that adopts the Bitcoin standard, and then some other country may build a strategic Bitcoin reserve after the United States. However, for tokens like LIBRA, the so-called "bigger fools" are those who bought after Javier Milei's announcement on platform X. That's it – there are no more buyers.

Unregulated Gambling

The operation of meme coins is similar to that of online casinos. They provide entertainment and promise quick profits, but only those who create and promote them can benefit from it. Unlike the well-known risks of regulated gambling, meme coins are often hyped by influential figures—from famous cryptocurrency influencers like Murad to the President of the United States—thus sparking relevant discussions on social media. The harsh reality is that, just like in a casino, the odds of winning overwhelmingly favor insiders and early adopters, while most people suffer losses.

The meme coin craze clearly relies on speculation and psychological stimulation—it's a game that ignites emotions and leaves players with empty wallets. Platforms like Pump.fun help issue meme coins and have made huge profits from them, proving that selling shovels during the "gold rush" is the best way to make money. However, opening a casino requires a license and must operate within strictly designated areas, so why can anyone issue their own meme coin?

This situation may change soon.

Will this situation come to an end?

The lack of regulatory oversight has allowed meme coins to grow explosively. How did we get here? Let's take a look at the recent activities of the U.S. Securities and Exchange Commission (SEC), which has filed lawsuits against major decentralized finance (DeFi) protocols and large cryptocurrency companies attempting to act fairly. Another serious initiative is the "Operation Chokepoint 2.0" launched by the previous U.S. government, targeting the entire crypto industry. All these initiatives have not only stifled honest companies that have created meaningful things in the crypto space but have also indirectly sparked a counterforce, namely other participants who profit from the ambiguous rules.

As a result, cryptocurrency exchanges have recently listed meme coins almost immediately after their issuance. The chaos in the regulatory space has turned the crypto industry into a massive global casino. Previously, everyone hoped to win in this gamble; however, now, with losses emerging, a general sense of disappointment seems to be spreading.

Still, there is a silver lining. The current U.S. government can undoubtedly be called "crypto-friendly," which means that we are likely to see significant regulatory progress this year. This is especially important for the Bitcoin decentralized finance (DeFi) space, which has long found a product-market fit and is rapidly evolving to capture the market for traditional finance (banks, brokers, and other intermediaries).

It is crucial to rewrite outdated financial regulations as soon as possible. The old rules were designed for systems based on trust in centralized intermediaries, while the new framework must incorporate smart contracts – in other words, executable blockchain code. A more robust regulatory framework may introduce stricter requirements, including mandatory disclosures for token issuances, requiring the public identification of creators, and restrictions on listings on centralized exchanges.

However, market participants may learn lessons from their own costly mistakes, even without external direct intervention, thus becoming more cautious when investing in meme coins. After experiencing a series of harsh yet thought-provoking meme coin "rug pull" incidents, the Web3 community must have gradually realized that such projects rarely reward adventurers. If someone is still determined to take the risk, they should view it as a trip to the casino: only bring the portion of funds they can afford to lose and enjoy the fun that this process brings.

For those who have no interest in such ventures, and those who genuinely want to accumulate wealth and pass it on to future generations, welcome to the stable, regular regular purchase of Bitcoin. Now, it seems that the market is just beginning to realize this more robust way of managing money.