Unlike lotteries, memecoin schemes tend to more closely resemble Ponzis, being inherently self-serving and lacking a time-allocated win or loss window, instead depending on a game of chicken whereby a small number of in-the-know participants time their exit before the crowd catches on. Anonymous memecoin projects ostensibly lack a higher purpose and are much more opaque in nature, with most funds funneling into the hands of a few founders and early buyers while the majority who jump in later are left with losses. Of course, most lotteries raise funds for state expenses or charities and are verifiably fair with posted odds of winning. “This online lottery, accessible to the entire world, is a use case.”

So far, Van Bourg says, the major use cases of blockchain have been DeFi and NFTs, along with what he calls the OG use case, cryptocurrency itself. Van Bourg looks at the situation from a “TradFi-informed” perspective. “Pepe was the only thing that was running,” he says, “and there’s not that much liquidity.” A new use case? Such activities can “suck liquidity” out of bitcoin and ether, he says, after which “everything starts crashing” once the meme coin loses momentum and people eventually reallocate their funds out of BTC and ETH.įelman suggests the other possibility is that the pepe coin craze was just an isolated event. It’s when you have nothing better to do with your money.” “The pepe blow-off and the crazy amount of capital that flew into pepe, was that a sign for the health of the market?”įelman says there are two sides to the argument. Institutions can’t “touch this stuff,” he says, but they can pay attention to the activity because “it’s a great signal.” “It’s been a crazy uptake in memecoinery,” Felman says, “and it’s all retail.” On a recent 1000X podcast, Avi Felman, head of digital asset trading at GoldenTree, and Cumberland’s Global Head of Trading Jonah Van Bourg spoke to Blockworks about the memecoin’s activity and how it could point to a crypto utility that is often considered illegitimate.

The coin surged from virtually nothing to a market cap of around $1.5 billion in just a few weeks, sparking debates about pump and dump schemes and market manipulation. The recent pepe memecoin run saw early buyers earning millions of dollars on hundred dollar bets during a period of relative stagnation in the crypto market.

That is, except for the hard work that went into earning the money that is then lost the vast majority of the time. Lotteries, casino games or gambling in general - it’s all about acquiring instant wealth with little or no effort.

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