Top 3 Reasons Why New Crypto Investors Must Ignore Meme Coin Allure

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Top 3 Reasons Why New Crypto Investors Must Ignore Meme Coin Allure – Crypto News

Published

4 months ago

March 4, 2025

Dripp

Meme-themed cryptos are an intriguing part of the trading industry, and their value is based on internet memes and investor demand. In the last few years, meme coin cryptocurrency status has turned from volatile and low-value digital assets to profitable opportunities due to their explosive rallies. However, the hype seems to settle, and experts believe new crypto investors must ignore them. Why? Let’s discuss this.

Meme Coin News: Meme Era is Crumbling

The current market scenario isn’t favorable to any cryptocurrency. Every digital asset, from Bitcoin to altcoins to meme coins, is facing a downtrend. However, the downfall of the meme coin category began even before this crypto market crash.

The global meme coins’ market cap dropped more than 140% from its $127.26 billion peak in January 2025, a clear indication of its downfall. Even Donald Trump’s family launched meme cryptocurrencies, TRUMP and MELANIA, which failed to maintain their performance, hinting at major issues within this category.

Elon Musk, who has supported these digital assets for years, has warned about them. In The Joe Rogan Experience podcast, Musk compared meme coins to casino chips, claiming that wishing for profit with these cryptos is similar to or as unrealistic as hoping to win at a casino.

If you expect to win at meme coins, you’re being foolish. You’re not going to win with meme coins. Don’t sink your life savings into a meme coin,” said Elon Musk.

However, this is just one part. Analysts believe the meme coin hype is dead. One such significant analyst pointed out three reasons for this. Let’s discuss this.

3 Reasons Why New Crypto Investors Must Ignore Meme Coin Allure

In a recent X post, Crypto analyst Flood pointed out three main issues with meme-themed cryptos: the rising number of rigged incidents, their performance, and hidden fees. Overall, the trader has questioned why people are still trading in these assets, especially after knowing all these risks.

1. The Game is Rigged

Flood believes the meme coin market is strategically designed to benefit insiders and early movers while leaving latecomers with losses. He added, ” The game is and has been rigged for months,” discussing how insiders control liquidity and fluctuate token prices. Such incidents have left most participants in loss.

The incidents have grown after the launch of Pump.fun and similar launchpads, which have created hundreds or thousands of meme-themed cryptos daily. However, most failed. January data discloses that only 1% of 25,000 created tokens graduated or gained any liquidity.

2. Low Valuation & Rare Market Success

Not only Flood, but many analysts believe that most of the Pump.fun launched cryptos never gained traction. He even claims that only four out of the millions of tokens on the platform had a market cap above $100M, indirectly alleging it as a money trap.

Talking of market cap, even the top meme coins like Dogecoin or Shiba Inu gained market traction due to social media hype. However, even their recovery is hard to manage after this massive crash.

3. Extravaganza Fees

Flood added that crypto investors not only bear losses on their investments but also pay massive fees. He claims that over $1.5B has been extracted via fees from traders trying to buy, sell, and launch meme coins.

Over $1.5B has been extracted via fees for execution

Although such fees exist for execution, a large portion goes to central entities and insiders, leaving traders with even higher losses.

Key Points To Note

Meme-themed cryptos thrived in 2024 amid excess liquidity and speculative euphoria. However, reality is catching up, as the meme coin market cap dropped by nearly $74.5 billion in a month and a half.

It signals that investors’ interests are shifting from these hype based cryptocurrencies. Although this category would face an uptrend with the right conditions, investors like Flood don’t advise this path for new investors.