Source: Cointelegraph Original: "{title}"

Views from: Georgii Verbitskii, Founder of TYMIO

Over the past year, meme coins have dominated the narrative in the crypto industry, leading to a series of high-profile events where most traders lost money while insiders profited. The Libra token alone caused approximately $4.4 billion in public losses. Unlike previous crypto cycles, where broad market growth rewarded holders, today's meme coin speculation has created an environment where the chances of success for ordinary traders are slim. So, how have meme coins led the market into a dead end? Will this phenomenon ever come to an end?

Investment or speculation?

Investment and speculation are fundamentally different games with different rules. Investing is not about making quick money but about buying the right assets to protect capital for long-term growth. Typically, investors do not wait for the "best entry point" but purchase assets that they can hold for the long term. The appreciation of these assets relative to fiat currency is usually based on fundamental factors. For example, stocks, gold, and Bitcoin (BTC) rise against the dollar, while the dollar itself faces risks of unlimited issuance and inflation.

Certain assets have additional growth drivers—such as rising demand for real estate, increasing corporate profits, or even government adoption of Bitcoin—but these are merely additional benefits. The key point is that the assets in which one invests should not lose all their value. Investors focus on long-term macroeconomic trends, which help them preserve and grow their wealth.

On the other hand, speculation is a zero-sum game where a few savvy investors profit from the uninformed majority. Typically, these speculators chase quick profits. This is the state of meme coins. Unlike traditional investments, meme coins have no intrinsic value, dividends, or interest returns. Take Bitcoin as an example; the "greater fool" is the buyer, as more companies and countries incorporate Bitcoin into their strategic reserves, but the "greater fool" for the LIBRA token is those who bought it after Javier Milei's announcement—without any other buyers.

Unregulated gambling

Meme coins operate similarly to online casinos. They offer the promise of entertainment and quick profits, but ultimately only those who create and promote them benefit. Unlike regulated gambling, the risks of meme coins are often hyped through influential figures—from famous crypto influencers like Murad to the President of the United States—and the narratives on social media. The harsh reality is that, like casinos, the odds overwhelmingly favor insiders and early adopters, while most people face losses.

The frenzy around meme coins clearly relies on speculation and psychological triggers—this game stirs emotions, emptying players' wallets. Platforms like Pump.fun, which facilitate the launch of meme coins and reap substantial profits, prove that "selling shovels" is the best way to profit from a gold rush. Why is it that opening a casino requires a license and is chosen to be set up in specific areas, while anyone can launch their own meme coin?

Soon, things may change.

Will this end?

The lack of regulatory oversight has given rise to the explosive growth of meme coins. How did we get here? Let's review the recent activities of the U.S. Securities and Exchange Commission (SEC), particularly the lawsuits against major decentralized finance (DeFi) protocols and some large crypto companies attempting to compete fairly. Another significant step was the previous U.S. government's "Operation Chokepoint 2.0" against the entire crypto industry. All of this not only stifled companies creating meaningful products in the crypto space but also indirectly propelled the rise of other players exploiting ambiguous rules.

As a result, crypto exchanges have recently listed meme coins almost immediately after every new token launch. The chaos in the regulatory landscape has turned the crypto industry into a global casino. In the past, everyone hoped to win in this gamble; now, with losses, a pervasive sense of disappointment seems to have spread.

However, there is still a glimmer of hope. The current U.S. government can be clearly described as "crypto-friendly," which means we may see significant regulatory progress this year. This is particularly important for the DeFi industry, as it has found its product-market fit and is rapidly growing, capturing market share from traditional finance (banks, brokers, and other intermediaries).

It is necessary to rewrite outdated financial regulations as soon as possible. The old rules were designed based on a system that relied on trusted centralized intermediaries, while the new framework must incorporate smart contracts—in other words, blockchain code that must be executable.

A stronger regulatory framework may impose stricter requirements on token issuance, including mandatory disclosure of founders' identities and restrictions on listings on centralized exchanges.

However, market participants may learn valuable lessons from costly mistakes, even without direct intervention, and become more cautious about meme coin investments. After a series of harsh but enlightening "rug pull" events involving meme coins, the Web3 community should ultimately realize that such projects rarely reward those who dare to take risks. If someone still decides to take the plunge, they should treat it as a trip to the casino: only bring the amount they are willing to lose and make the most of the experience.

For those who do not like this approach or those who genuinely wish to grow wealth through investment and pass it on to future generations, welcome to the real world of purchasing regular Bitcoin. It seems the market is just beginning to realize this.

Views from: Georgii Verbitskii, Founder of TYMIO

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This article is for general informational purposes only and is not legal or investment advice. The views, thoughts, and opinions expressed in the article are solely those of the author and do not necessarily reflect or represent the views of Cointelegraph.

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