The Carnival-Casino Era of Cryptocurrencies Has Come Back With a Vengeance

Riding a broader wave of investment in bitcoin that was itself spurred by the election of Donald Trump. It's minting millionaires while potentially harming others

The cryptocurrency market has seen a new wave of interest in memecoins, which are often created quickly and named after viral internet memes. These coins have seen incredible gains, with some rising by 10 times in a matter of hours. However, experts warn that these coins are highly risky and could disappear just as quickly as they appeared.

Memecoins are a recent phenomenon in the cryptocurrency world. They are typically created quickly and named after viral internet memes. Despite having no clear use case or value proposition, these coins have seen incredible gains, with some rising by 10 times in a matter of hours.

However, experts warn that these coins are highly risky and could disappear just as quickly as they appeared. They also add that many of these coins appear to be scams, designed to enrich the creators at the expense of unsuspecting traders.

One of the most popular memecoins is Fartcoin, which was created after a story about a New York man keeping a squirrel without permission went viral. Named after the Peanut the Squirrel incident, PNUT coin saw gains of up to 90% at one point.

According to blockchain data, at least one holder of the coin is sitting on nearly half a billion dollars. However, PNUT coin has also seen a sharp decline from its peak value of $2.47 as the news story has faded from view.

Another memecoin, Hawk coin, was released earlier this month by Haliey Welch, a Tennessee woman who has parlayed a viral lewd street interview into a successful podcast. Over the course of 24 hours, Hawk’s market cap peaked at $500 million before collapsing to $28 million.

The dramatic losses in funds led to complaints, which were not independently verified by NBC News. Facing accusations of insider trading, Welch released a statement saying neither she nor anyone on her team had sold the coins.

She instead blamed “sniper” algorithmic bots, which are designed to sell as prices begin to surge, for the price dump and losses.

Bautista said that indeed algorithmic trading, which has long been part of mainstream trading on Wall Street, is now routinely deployed in the memecoin space.

He estimates that of the top-20 traded coins in crypto, half are memecoins whose trades are almost entirely driven by bots designed to spot and respond to price movements.

“It’s gotten to the point where the coins are created, listed, and traded within hours. And because they are worthless, you’re betting on the ‘greater fool,’” said Bautista.

“You’re thinking, ‘I’m early to this, someone will buy the bags.’ But there’s no underlying driver of its value.”

According to Bautista, some memecoins are also not legally able to be purchased from U.S. soil on most of the crypto exchanges that offer them.

Many of the memecoins are also created on a website called Pump.fun, which allows users to “launch a coin that is instantly tradeable in one click for free.”

Launched in January 2024, the site has generated over $288.4 million in revenue since its inception, according to analytics data cited by CoinTelegraph, a crypto industry publication.

Earlier this month, the United Kingdom’s Financial Conduct Authority said the website was not authorized in the country and warned anyone who interacted with a product or service associated with the site had no investor protections.

Despite this, the site's terms and conditions state that its provisions are governed by “the laws of England.” A spokesperson for the website was not immediately available for comment.

It may be the digital Wild West, but some tools have been developed to help nonsavvy memecoin participants avoid outright scams.

A site called Rugcheck.xyz bills itself as capable of scanning memecoin ownership data to determine whether an actor or small group of actors are capable of putting their thumb on the scale of the market.

Pump.fun itself says it prevents “rugs,” or sudden price dumps, by making sure that any tokens it launches have no presales or small-batch allocations that would benefit insiders.

It is not clear how much longer the current crypto “bull” cycle will last, but at least one analyst believes it is still in relatively early innings given likely developments next year.

These include potentially further reductions in interest rates by the Federal Reserve and the implementation of more crypto-friendly policies by the Trump administration.

“There are lots of events in 2025 that can help drive bitcoin and crypto prices up further,” said Gracy Chen, CEO of crypto group Bitget, in an interview with NBC News.

“In fact, Trump world has already shown signs of accelerating its embrace of cryptocurrencies. Bloomberg News reported on Friday that World Liberty Financial, a crypto project ‘inspired by Trump,’ has been buying millions of dollars worth of tokens beyond bitcoin, a sign that the decentralized finance lending platform could launch soon.”

Trump has been named as an eventual “financial beneficiary