Markus Thielen, head of research at Matrixport, compared investing in memetic cryptocurrencies with a passion for lottery games.
In an interview with Cointelegraph, Markus Thielen noted that meme tokens have experienced a huge surge in recent weeks.
Earlier this month, the capitalization of PEPE memcoin, dedicated to Pepe the frog, exceeded $1 billion, while sales of Milady collectible tokens rose by more than 2,000%, helped by a tweet from Tesla CEO Elon Musk.
Thielen noted that despite the staggering jumps in exchange rates of such tokens, they have no practical value.
“A lot of people from lower social classes play the lottery – it’s their way of trying to get out of the bottom and increase their wealth.
They take risks in lotteries to make lightning fast money, and it’s a lot like meme cryptocurrencies,” Thielen said.
Thielen noted that many users, especially young people, buy memcoins for fun. They bet on their popularity, which undermines the principles underlying long-term investments.
The value of meme tokens depends on the mood of the community, so their rate is almost impossible to predict.
Matrixport’s top manager warned investors against investing in memcoins with an unknown development team and no project roadmap.
Thielen noted that when trading these types of tokens, you need to be able to save your investment in time to escape at the right moment, so it’s important to put a stop loss when buying high-risk assets.
Recall that recently the cryptocurrency exchange Coinbase also spoke badly about meme cryptocurrencies, in particular PEPE. This has caused a wave of outrage in the crypto community.