Former CTO of Coinbase and general partner at Andreessen Horowitz, Balaji Srinivasan, has criticized the meme coin segment amidst the hype surrounding TRUMP and MELANIA.
A memecoin is a zero-sum* lottery.
There is no wealth creation. Every buy order is simply matched by a sell order. And after an initial spike, the price eventually crashes and the last buyers lose everything.
* It’s actually negative sum if the platform takes a cut.
— Balaji (@balajis) January 19, 2025
The entrepreneur described such assets as a “negative-sum lottery,” where participants trade among themselves while platforms take commissions. He likened buying meme coins to gambling and noted that they should be approached accordingly.
“[In meme coins] there is no value creation. Every buy order is simply accompanied by a sell order. After the initial spike, the price eventually falls, and the last buyers lose everything,” Srinivasan explained.
In his view, a broad range of crypto investors should focus on assets that retain value in the long term.
Analysts at Bernstein, on the other hand, noted the launch of the “presidential” meme coin as a sign of a more favorable period for cryptocurrencies worldwide.
“This marks a new era of regulation where governments view cryptocurrency as a technology for direct engagement with the masses. This could sway some politicians towards a friendlier stance on digital assets,” the firm stated.
Bernstein also highlighted the benefits for American developers, who may no longer fear launching their own tokens in a previously problematic jurisdiction:
“Given that the previous US regulatory regime was notable for suppressing [crypto app creators] and enforcing measures against token activities, the launch of a presidential asset is a significant social signal for American developers.”
Back in January, activist Ryan Fournier faced community criticism for selling half of the meme coin supply dedicated to lifting the TikTok ban in the US.