The Overwhelming Surge of Meme Coins is Becoming Exhausting

The rise of meme coins raises concerns over scams and market instability

Meme coins have rapidly transformed from a niche segment of the cryptocurrency world into a substantial market, capturing widespread attention and investment. However, with their growth has come an alarming increase in scams and fraudulent activities, leading many in the industry to express their fatigue with the ongoing influx of new tokens and unscrupulous participants.

This once-obscure segment of the crypto market has entered the mainstream consciousness, attracting attention even from those who might not typically follow cryptocurrency. Despite their lack of tangible use cases, meme coins have gained popularity primarily through speculation, generating a mixed bag of excitement and frustration among investors. Recent events, such as the controversy surrounding Argentine President Javier Milei promoting the meme coin Libra—which subsequently crashed—illustrate the risks involved. Reports indicated that 86% of investors lost around $251 million, resulting in calls for Milei's impeachment as critics labeled the situation a fraudulent scheme. Although Milei has distanced himself from the coin and removed his promotional post, the incident mirrors a growing trend of deception in the meme coin market.

Industry experts assert that the prevalence of scams has intensified alongside the rise of meme coins. Nic Puckrin, founder of The Coin Bureau, noted that the overall sentiment in the market is likely at a low point, comparable to the aftermath of the FTX collapse. Daily launches of new meme coins, often pushed by celebrity endorsements, have created an environment rife with skepticism and weariness. Puckrin remarked on the evolution of meme coins, stating they began as community-focused projects aimed at bringing people together but have since devolved into profit-driven ventures that exploit investors.

The initial meme coin phase began around 2014, primarily serving as a means for communities to unite over shared interests. These tokens were viewed as fun, low-cost investments that appealed to retail investors. Even during the downturn of 2022, interest in meme coins persisted among crypto enthusiasts. However, the landscape shifted dramatically as more retail investors began treating meme coin trading as a form of gambling.

Vic Laranja, a meme coin trader and content creator, pointed out that the recent meme coin explosion coincided with the launch of spot bitcoin ETFs in early 2024, which spurred increased liquidity and risk-taking in the crypto market. The introduction of the Pump.Fun platform further catalyzed this surge, making it easier to mint new tokens. By January 2025, nearly six million meme coins had been created on the platform, showcasing the frenetic pace of new launches.

Although Pump.Fun attempted to reduce nefarious activities by standardizing contract addresses and implementing measures to prevent developers from minting excessive tokens, it did not eliminate the pump-and-dump schemes that plague the market. A recent class action lawsuit alleges that the platform has become a breeding ground for sophisticated Ponzi and pump-and-dump schemes. Investors were further frustrated by the wild promotional tactics used to market these coins, including inappropriate live streaming content that ultimately led to the discontinuation of the feature.

As the meme coin frenzy continues, even high-profile endorsements, such as those from the Trump Organization, have encouraged imitators, resulting in erratic price fluctuations that draw in more participants. Observers suggest that the rapid proliferation of these tokens detracts from more fundamentally sound crypto assets, with some estimates suggesting that $6 billion in liquidity has been siphoned off from the overall crypto ecosystem due to meme coins.

Looking ahead, regulatory clarity appears essential for the future of the cryptocurrency market. The recent establishment of a dedicated unit by the Securities and Exchange Commission to tackle cybercrime, including blockchain fraud, reflects an increasing awareness of the need for oversight. However, questions remain regarding the regulatory framework and jurisdiction for meme coins. Experts like Puckrin emphasize that the recent activities within the meme coin space often border on criminality and insider trading, regardless of whether they classify as securities or commodities.

To foster a healthier environment for innovation within the crypto space, Laranja advocates for clearer regulations. As fatigue sets in among investors, many are losing faith in the meme coin market's potential for genuine growth and development, underscoring the need for a more structured approach to navigating this increasingly chaotic landscape.