The world of cryptocurrencies is split on the virtues of meme coins, digital tokens derived from online jokes and pop cultural allusions. While seasoned players like Bitcoin advocate Adam Back see them as a transitory fad, supporters welcome them as a possibility for huge gains.
Risky Ride On The Hype Train
Recent months have seen Meme currencies sweep the crypto market. Online communities and celebrity sponsors have driven spikes in value for tokens like Pepe and Dogwifhat. This tendency is best shown by the way influencer Iggy Azalea promotes her own meme coin.
Analyst Murad Mahmudov sees promise in this field but advises against extremely speculative microcap meme coins, basically little enterprises in the crypto realm.
There are detractors of this speculative frenzy as well. Vitalik Buterin, a co-founder of Ethereum, shares Back’s worries, contending that many meme currencies lack creative ideas or practical uses. He calls into doubt their long-term survival.
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, as referenced in the initial Bitcoin whitepaper, has a past of discounting meme currencies with a straight-forward disdain. He aimed at meme makers and their works in 2021 as well.
Back criticised the so-called “shitcoiners,” claiming they are horrible at creating memes and citing no good rationale for that.
Blockstream cofounder further dampened the enthusiasm around pricey meme-based NFTs like EtherRock, which sold for millions despite being, in his words, “a low-resolution gif that has no substance.”
Is Bitcoin The Only ‘Investment Grade’ Crypto?
Back’s position is really clear: only one cryptocurrency with actual investment promise is Bitcoin. He is dubious about most alternative cryptocurrencies (altcoins) as well as meme coins.
This unflinching backing of Bitcoin is not new Back has often referred to Bitcoin as “very inexpensive,” even though its price in April this year hung at $66,720.
Like gold, he thinks the market undervalues Bitcoin’s prospective as a digital store of wealth. Back further contends that investors must really grasp the long-term value proposition of Bitcoin by means of a few bear markets such as the recent price declines that saw Bitcoin sink to a five-month low.
A Battle Of Memes And Fundamentals
The conflict between meme coins and more established cryptocurrencies like Bitcoin reflects a larger argument about the direction of digital assets. Meme coins expose a risk on cultural relevance and communal influence.
Their success depends on keeping buzz and drawing fresh money. Conversely, Bitcoin depends on its current technology and rising acceptance as a valid financial tool.
Featured image from WSJ, chart from TradingView
