The cryptocurrency world is divided over the merits of meme coins – digital tokens inspired by internet jokes and pop culture references. Proponents hail them as a chance for explosive returns, while established figures like Bitcoin evangelist Adam Back scoff, calling them a passing fad.
Risky Ride On The Hype Train
Meme coins have taken the crypto market by storm in recent months. Tokens like Pepe and Dogwifhat have seen surges in value, fueled by online communities and celebrity endorsements. Influencer Iggy Azalea’s promotion of her own meme coin exemplifies this trend.
Analyst Murad Mahmudov sees potential in this space, but warns against highly speculative microcap meme coins – essentially tiny startups in the crypto world.
This speculative frenzy isn’t without its critics. Ethereum co-founder Vitalik Buterin echoes Back’s concerns, arguing that many meme coins lack real-world applications or innovative technology. He questions their long-term viability.
reminder, zoom out. prior bull runs had half a dozen -30% draw downs too. we’re at about -26% (-27% earlier).
in fact if anything, recent draw-downs seem to be less deep, but people forget the normal bull market pattern. don’t panic, buy the dip. or buy a bit of $CMSTR with… pic.twitter.com/vBOjFN1TOn
— Adam Back (@adam3us) July 5, 2024
Back, famously mentioned in the original Bitcoin whitepaper, has a history of dismissing meme coins with characteristic bluntness. In 2021, he took aim at both the meme creators and their creations.
Back blasted the so-called “shitcoiners,” saying they are terrible at making memes and the reason for that is unclear.
The blockchain technology company Blockstream cofounder further doused the hype surrounding expensive meme-based NFTs like EtherRock, which sold for millions despite being, in his words, “a low-resolution gif that has no merit.”
Is Bitcoin The Only ‘Investment Grade’ Crypto?
Back’s stance is clear: Bitcoin is the only cryptocurrency with true investment potential. He views meme coins and most alternative cryptocurrencies (altcoins) with suspicion.
This unwavering support for Bitcoin isn’t new. Back has repeatedly called Bitcoin “super cheap,” even when its price hovered around $66,720 in April this year.
He believes the market undervalues Bitcoin’s potential as a digital store of value, similar to gold. Back further argues that a few bear markets, like the recent price drops that saw Bitcoin plummet to a five-month low, are necessary for investors to truly understand the long-term value proposition of Bitcoin.
A Battle Of Memes And Fundamentals
The clash between meme coins and established cryptocurrencies like Bitcoin reflects a deeper debate about the future of digital assets. Meme coins represent a gamble on cultural relevance and community power.
Their success hinges on maintaining hype and attracting new investors. Bitcoin, on the other hand, rests on its established technology and growing adoption as a legitimate financial instrument.
Featured image from WSJ, chart from TradingView