Balaji Blasts Memecoins, Calls Them 'Zero-Sum Lottery' As $TRUMP Token Puts Market In Crisis

As the official memecoin of Donald Trump's second presidency flirts with a $10 billion market cap, and Melania Trump, the next first lady, launches her own, Balaji Srinivasan, former CTO of Coinbase, said in a thread on X that this is all. the token division could be equated with gambling.

“There is no wealth creation. Each buy order is directly matched with a sell order. And after an initial spike, the price eventually falls and the buyers end up losing everything,” he posted, calling memecoins zero sum – even negative sum after exchange fees – lottery

Balaji said that memecoins should be discussed in the same way as gambling in Las Vegas for entertainment purposes.

“Most people should buy assets that will hold their value over the long term,” he continued. “Sometimes it's possible to add use cases to memecoin, or keep it in the headlines to keep its value high indefinitely. And we've seen examples of that as well.”

In response to the post, many asked Balaji if bitcoin was ever considered a memecoin, and he argued that it was not because of its use cases and ten-plus year staying power.

“Bitcoin is the base level asset of blockchain with ~800 Th/s in hashrate across hundreds of data centers around the world,” he wrote. “It grew gradually over time, rather than its -all at once, and the mining release schedule limits what can be sold by any party.”

Market interest in Trump's official memecoin has drawn liquidity out of other memecoins, with CoinGecko data reporting that the share has declined by 8% in the past 24 hours. Many of the top memecoins like DOGE, SHIB, and BONK are down over 10% on the day.

READ MORE: Bitcoin Returns to $100K, TRUMP Tanks 30% as Melania Memecoin Skyrockets