Former Coinbase CTO Balaji Srinivasan has criticized memecoins, calling them a “zero-sum lottery.” He argues that these coins do not create wealth, and buyers often lose everything when prices plummet. On X, Srinivasan, also a former general partner at Andreessen Horowitz, warned his 1.1 million followers against investing in memecoins. While acknowledging that some memecoins may have use cases, Srinivasan cautioned investors to avoid investing “in anything you can’t afford to lose.” Srinivasan’s comments on Jan. 19 came a day after U.S. President Donald Trump launched the official TRUMP memecoin. Following its launch, the memecoin surged in value, briefly ranking among the top 20 cryptocurrencies by market cap. Trump’s wife later launched her own memecoin, MELANIA, which has surged in value by 9,000%. However, both the TRUMP and MELANIA memecoins lost significant value in the hours leading up to Trump’s inauguration. Reports suggest that insider selling may have contributed to the price drop, prompting claims of a “rug pull.” As of January 20 at 4:40 p.m. U.S., the TRUMP and MELANIA memecoins were down 40% and 26.7%, respectively.
Meanwhile, Srinivan acknowledges that some memecoins have endured, but advises users to be wary of politically-backed tokens.
“I agree that some memecoins have endured and have actually built communities. I would go so far as to note that some of the top 100 coins are essentially ghostchains and de facto memecoins. But a very rapid price appreciation in a highly politicized environment has a high potential for trouble. A lot depends on what happens after the first major price drop. There is no one to blame for DOGE,” said the former Coinbase CTO.
So, do you agree with him?
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