Bitcoin launched in January 2009 and, as such, is now a surly teenager but, in reality, still a young financial product if you consider shares, bonds, gold and the like have all been around for centuries.
Of course, these days it is no longer just bitcoin. CoinMarketCap has details of nearly 11,000 crypto coins of various types and a total market cap of almost $3-trillion. The market cap seems large, but consider two points. First, more than half is bitcoin, with number two, ethereum, only a little over a quarter of a billion dollars. But perhaps, considering the hype around crypto, the real surprise is just how small it is, with the entire $3-trillion crypto market cap being less than either Apple, Microsoft or Nvidia.
About a decade ago we started to see more and more crypto coins being listed. Many had underlying characteristics that set them apart from bitcoin and, as such, justified their purpose.
Most notable is ethereum, launched in mid-2015. There are many features of bitcoin, with blockchain technology being one of them. Forking bitcoin and creating your own crypto coin was possible but needed technical skills.
Ethereum came along with the idea that anything could use its blockchain, and this made new coin issuance much easier, leading to an explosion of initial coin offerings (ICOs).
This was followed by the surge of meme coins. The first real meme coin was doge, which predated ethereum and was started in large part to show just how silly all the different coins were. Being pre-ethereum, they’d created their blockchain and it was never expected to amount to anything, as it had no purpose except to poke fun at the exploding crypto market.
These days, however, creating a meme coin is as easy as visiting a website, deciding on a name, image and code, and within minutes you have your coin trading on their platform
These days, however, creating a meme coin is as easy as visiting a website, deciding on a name, image and code, and within minutes you have your coin trading on their platform. The process is free, but the platform charges around 1% per transaction.
This brings us to the final stage of crypto, which is the rug pull. This is nothing new in the world of finance and is traditionally called the pump and dump. You get everybody excited about an asset you already hold in the hope their excitement sends the price higher. Then, as it pumps higher you sell into the excitement, essentially throwing your followers under the bus.
Meme coins have zero purpose except to rug pull, and sure, money can be made, but you have to get in early and exit quickly. It is, frankly, akin to gambling and the greater fool theory. Is there a greater fool I can sell to at a higher price?
This year, fartcoin is already down more than 90% since January highs, and official Trump is down more than 80% since listing.
If you are going to play here (and you are playing, not investing), use money you can afford to lose, get in early and get out even quicker.
