Meme Coins Are ‘A Pure Ponzi’ And ‘Destroying Crypto,’ Says Trader Who Thinks Dogecoin Was Different

Swing traders in the midst of meme coin supercycle frenzy Pikolas Cage has taken a stand against meme coins, arguing that they are harmful to the entire cryptocurrency ecosystem.

what happened: “They are indifferent from a technical point of view and offer nothing but pure Ponzi,” the trader wrote, highlighting the lack of substance.

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IMO meme coins are destroying cryptocurrencies.

I still maintain the opinion that meme coins are a negative for the sector.

They are uninteresting from a technical point of view and offer nothing but pure Ponzi.

They are predatory in nature and usually create a market…

— Picolas Cagged (@Picolas_Cagged) April 25, 2024

He criticized their predatory nature, suggesting they create an unfair market environment that pits less informed participants against more knowledgeable traders.

What is the process: According to Picolas Cage, smart traders are exploiting memecoins by accumulating large positions through liquidity pools and MEV bots without significantly impacting the price. They then promote these meme coins to their followers, creating artificial demand and luring inexperienced investors into buying.

This process perpetuates a “player vs. player” dynamic disguised as “player vs. environment,” where large accounts sell their holdings to unsuspecting individuals in hopes of making huge profits, he said. insists.

He also points out that memecoins are distracting from real innovation and potential wealth creation opportunities in the broader crypto market.

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Also read: Are Dogecoin and Shiba Inu ready for the next step up?

Why it’s important: Cage goes back to the bull phase of meme coins. Dogecoin’s (CRYPTO: DOGE) Previous pump cycles were fueled by “norms” that leveraged the profits from. game stop Enter the virtual currency market with stock investment and give the proverbial middle finger to your “virtual currency friends.” But this is in contrast to the new generation of meme coins, which Cage considers to be purely extractive.

In conclusion, Picorus Cage’s criticism raises important questions about the impact of memecoins on the cryptocurrency market and the risks they pose to uninformed investors.

what’s next: The impact of memecoins and Bitcoin as an institutional asset class is a topic expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on November 19th.

Read next: The trader who turned $15,000 into $5 million predicts these 4 meme coins to emulate the success of DOGE, SHIB, and FLOKI

This content is created in part using AI tools, and reviewed and published by Benzinga editors.

Image: Shutterstock

© 2024 Benzinga does not provide investment advice. All rights reserved.

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