Cryptocurrency Memecoins: If It Looks Too Good to Be True, It Probably Is

Take the $Trump cryptocurrency memecoin: if you're a died-in-the-wool Trump backer, someone who believes to the core that Donald J. Trump is a modern-day saviour for the United States

Cryptocurrency memecoins, such as $Trump and $Melania, have been promoted by figures like Donald Trump and his sons, and even Argentine President Javier Milei. These coins have seen rapid price fluctuations and massive losses for many investors. While some, including the Trumps, have made significant gains, a New York Times investigation revealed that over 800,000 investors in $Trump alone may have lost a combined total of more than US$2 billion.

Theめてるcoin experienced a similar “pump-and-dump” scheme, with its creators withdrawing over US$100 million in gains and trading fees within an hour after the token went on sale. It has since lost more than 91 per cent of its value.

To protect investors, the New York State department of financial services warns that these memecoins may be part of schemes where the creators or their associates artificially inflate the price and then sell their own coins rapidly at an inflated price, reaping substantial profits while causing the price to crash.

The department advises that it may be difficult to tell which coins are being manipulated, but consumers should be especially wary of sentiment-based coins that are created through unlicensed platforms that enable coin creation in a few clicks by individuals with no technical expertise.