Memecoins, catch them all!  Behind the scenes of the crypto casino

Memecoins, catch them all! Behind the scenes of the crypto casino

‘Did you buy $BOME? No, but I’m thinking of putting a card in it.”. This exchange between two anonymous accounts, read in one of the thousands of Telegram groups engaged in speculation about cryptocurrencies, illustrates the hectic atmosphere of the moment: $BOME is a cryptocurrency created by the Internet user a few hours before this exchange. Dark farms, digital artist known for his works with Pepe The Frog, this iconic frog of the digital counterculture. Launched on March 14, the $BOME cryptocurrency reached a capitalization of over $80 million in just a few hours. Time for insiders who invested very early to generate several hundred thousand, if not millions, of dollars in profits. On This rapid growth of a cryptocurrency that appears out of nowhere bears witness to a well-known phenomenon in the crypto sphere: the ‘memecoin season’, literally the memecoin season.

Illustrations by Pepe the Frog. Matt Fury.

In the jargon, a memecoin is nothing more and nothing less than a cultural cryptocurrency, born from the absurd, based on memes. The best known: the Dogecoina parody created in 2013 by two developers critical of crypto culture. “We didn’t create dogecoin to parody bitcoin because it is the pioneer, so I will always respect it. said Billy Markus World in 2021. We did it to make fun of all these clones that were created with great pretensions and most of which no longer exist today. Popularized by the logo depicting Kabosu, a Shiba Inu dog adopted by a Japanese teacher and made popular thanks to a blog in the 2010s, Dogecoin was subsequently invited to a Snoop Dogg music video and even if payment method at Teslaafter being publicly praised by Elon Musk himself.

In March 2024, Dogecoin’s capitalization will exceed $26 billion, more than twelve of the 40 CAC40 companies, such as ArcelorMittal, Veolia, Bouygues or Vivendi (owner of Prisma Média, parent company of Capital).

Hundreds of memecoins on the market

From then on, such success could only inspire countless similar projects: in the wake of Dogecoin, the crypto market saw the rise Shiba Inu ($19.2 billion in capitalization) or even Pepe (4.1 billion). There are hundreds in total, which are concentrated according to the site Coingecko a total capitalization of $65.7 billion. More recently launched – precisely on December 18, 2023 on the Solana blockchain – Wif shows performance that makes you wonder with a capitalization multiplied by 30 in just three months ($3.3 billion). To celebrate this financial success, the cryptocurrency community even launched a $650,000 fundraising campaign to display its logo on the Las Vegas globe. In crypto, culture always rhymes with excess. Needless to say, apart from these humorous features, these cryptocurrencies are not based on any basis other than excessive speculation.

Irony of history, while authorization of spot Bitcoin ETFs in the United States and the increasing use of the public Ethereum blockchain by traditional financial institutions suggests a structuring of this crypto ecosystem, it still faces a completely deregulated hidden side. “Their only use is the casino!” confirms Nicolas Vaiman, CEO of the blockchain analytics solution Bubble cards and regular contributor to Capital. Half of crypto users are just there for that. It really is a gamble and it’s part of the culture. People are willing to invest 1,000 euros in a project that defrauds them and that is part of the game, they don’t even start a procedure. We’re seeing incredible technical foundations emerge with layer-2, layer-3 solutions (secondary networks and upper layers of blockchain, editor’s note) and next to it we see a cryptocurrency with a dog logo and a flag that destroys everything!”

The myth of lottery-worthy winnings

A craze that is undoubtedly not ready to stop, as these memecoins represent for many the fastest route to substantial profits, while the more traditional cryptocurrencies offer a dynamic that they consider more conservative; even Bitcoin is up 35% in the past month. “It’s a casino where the ticket price is low, analyzes Gauthier Zuppinger, co-founder of the analysis agency NFT18. If you want to come home with ten euros, unlike NFTs, you can play with ten euros. And this fuels the imagination, a myth, in which it becomes possible to achieve multiples of ten, of a hundred. It is deeply ingrained in crypto culture, for both good and bad. Usually it is still the big players who benefit from this.”

Large wallets, often experienced in this ecosystem and sometimes initiators of cryptocurrencies or NFTs themselves. In the case of crypto Bome, the American influencer Cap – known for his NFT collection PixelVault or his investment in the Blur marketplace – a publicly reaffirmed his investment and even encouraged his audience to follow him. These influencers, like Farokh (chairman of the specialized media Rug Radio), followed by hundreds of thousands of subscribers, the trends of these memecoins make and break. “The fact that influencers like Beanie are promoting this crypto is indicative of what separates a good memecoin from a bad one, if we want to define them based on their value trajectory. But ultimately there is no basis. It is a game, a gambling game.”adds Gauthier Zuppinger.

A game in which the actors are always more numerous, mainly because that is not the case “It has never been easier to launch your token”notes Nicolas Vaiman, who emphasizes this “Creating cryptocurrency and listing it on a decentralized exchange has become as easy as starting a Facebook group”. That’s why some people use and abuse the system. According to the CEO of Bubblemaps, the creator of Shiba Inu – already a holder of 17% of its $20 billion-capitalized cryptocurrency – is hiding his personal cash in more than 150 wallets. tracked down by the French company. Others multiply cryptocurrency creations to the one that will attract enough liquidity to raise a nice nest egg.

It is therefore impossible to recommend this type of speculation, given the high risks of default. Most of these memecoins are stillborn, even more volatile than classic cryptocurrencies. Turbo, the cryptocurrency mentioned in our columns and created by an Australian artist using ChatGPT, no longer arouses any enthusiasm and has lost 60% of the value displayed at its highest historical level. But for the more daring people who decided to play roulette, there are certain precautions to limit the risks. “A wallet may not contain more than 0.5% of the number of tokens. It’s a red flag in our eyes, explains Nicolas Vaiman. Since a team can hide its tokens in different wallets, it is necessary to analyze the interactions between these wallets. You also have to look at what is being said on social networks to see if there is any hype surrounding a project.” And keep in mind that social networks cannot be investment recommendations, especially in a sector where each interlocutor has an interest in promoting the assets in his portfolio. “In groups on Telegram, Discord or Twitter we can build networks of trust, but these circles in no way guarantee good results,” remembers Gauthier Zuppinger.

It also remains possible to be interested in it, without taking the slightest financial risk, through the cultural prism and the memes created at will by these speculators. The memecoins will also have their festival: the Memeconorganized in May as part of the Non-fungible conference in Lisbon. The slogan ? “Let’s do it right”which could be translated as “Let us lose our wheat”. The crypto crowd has decided: memecoins, it’s better to laugh about them than to cry about them.

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