Key Risks of Investing in Memcoins
Date: 2025-03-06 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
According to him, the key factor influencing the value of such assets is the hype on social media, which can be caused by memes or celebrity comments, such as Elon Musk's tweets. This leads to the formation of price "bubbles" that can burst at any moment, bringing down the coin's rate.
Another serious problem is the lack of fundamental value. Unlike Bitcoin, which has a technological basis, real-world application, and a limited emission, memecoins are based solely on community interest. This makes them an unreliable instrument for long-term investment.
An additional risk is the possibility of market manipulation. Shatov noted that large holders, the so-called "whales", can artificially inflate the value of a token and then sell it en masse, causing a sharp drop in price. As a result, private investors often suffer significant losses.
In addition, there is a risk of fraud. According to the expert, many memecoins are created as part of the "pump and dump" scheme, when developers inflate the hype around the project and then disappear, leaving investors with devalued tokens.
We should not forget about regulatory risks. The authorities of a number of countries have a negative attitude towards speculative crypto assets, and in the event of bans or strict restrictions, the value of memecoins can instantly fall to zero.
"Memcoins can indeed bring quick profits, but buying them is more like gambling. For long-term investments, it is wiser to choose assets with a transparent economic model and practical application," Shatov concluded.
