Yes, the cryptocurrency is named Fartcoin. It is acknowledged to be entirely pointless. Despite this, its value has tripled in the past week, reaching a market capitalization exceeding $700 million — equivalent to that of Office Depot, Guess jeanswear, and the parent company of Steak N’ Shake.
The era of carnival-like cryptocurrencies has made a strong comeback, riding on the increased investment in bitcoin, which was further fueled by the election of Donald Trump. This surge is creating millionaires while potentially causing harm to others. However, everyone, including the losers, appears to be part of the joke.
The surge of “memecoiners” consists of both long-time bitcoin holders and individuals eager to change their fortunes in a time of soaring home and equity prices. According to Toe Bautista, a research analyst for GSR, a decentralized finance group, many memecoin traders are transitioning to areas of pure speculation, attracted by the gains resulting from bitcoin’s 130% rise this year, with 50% of the increase occurring since Trump’s election last month. Some see the opportunity to multiply their money tenfold overnight.
Bautista explained that many people view memecoin trading as the riskiest form of gambling, with the primary focus being on exiting positions to avoid being left with worthless coins. The trading activity revolves around the concept of betting on the “greater fool,” anticipating that someone else will pay a higher price for a particular memecoin.
The main risk associated with trading memecoins, which are often based on viral internet memes, is the potential for the meme to lose relevance in popular culture. Notably, some individuals have made substantial gains from specific news cycles. However, there are operational risks involved, as demonstrated by the rise and fall of “Hawk” coin, released by Haliey Welch, which experienced a significant market cap fluctuation within 24 hours.
Algorithmic trading has become a common practice in the memecoin space, with bots driving trades for many of the top 20 traded coins. While some argue that memecoins are legal due to the lack of formal categorization by the Securities and Exchange Commission, there are restrictions on purchasing certain memecoins from U.S. soil on most crypto exchanges.
Pump.fun is a website known for launching memecoins instantly for free. Despite generating substantial revenue since its inception in January 2024, the site has faced regulatory scrutiny, with the UK’s Financial Conduct Authority warning users about the lack of investor protections associated with the platform.
Efforts have been made to protect memecoin participants from scams, such as Rugcheck.xyz, which scans memecoin ownership data to detect potential market manipulation. As the crypto market continues to evolve, analysts anticipate further developments in the coming year, driven by factors like potential interest rate reductions by the Federal Reserve and crypto-friendly policies under the Trump administration.
While the memecoin world presents opportunities for profit, it also reflects a sense of economic disillusionment among young Americans who feel excluded from traditional investment avenues. The allure of high returns in a volatile market appeals to those seeking to make significant gains quickly, even if the risk is substantial.
