In 2019, the cryptocurrency market witnessed a surge in meme coins, capturing the attention of numerous investors. However, this influx of meme coins drained the limited liquidity from the altcoin market and left many investors holding the bag.
Prominent analyst Benjamin Cowen warns that the majority of these meme coins will ultimately become worthless and fade into obscurity. He cautions that those behind the creation and promotion of these tokens have little regard for the investors who buy into them.
In 2019, a lot of memecoins flooded the market. It sucked out the little liquidity the altcoin market had left.— Benjamin Cowen (@intocryptoverse) May 12, 2023
Just a few weeks later, those memecoins investors became bag holders.
A majority of those memecoins went to zero and are now completely forgotten.
According to Cowen, the primary objective of meme coin creators is to extract as much liquidity from the market as possible, while people are still susceptible to their schemes. He predicts that within a few months, these individuals will not only distance themselves from the scams they promoted but will also block anyone who attempts to confront them about their actions.
Cowen expresses little sympathy for those who repeatedly fall for these scams, emphasizing the importance of due diligence and learning from past mistakes. He attributes the increasing desperation of scammers to the gradual drying up of funds, a consequence of actions taken by the Federal Reserve.
In their quest for quick profits, these unscrupulous individuals continually launch new projects, hoping that one of them will gain traction. Once they achieve their goal, they execute a rugpull and move on to the next scheme, leaving investors with worthless tokens.
Cowen urges the crypto community to stop supporting these scams and adopt a more cautious approach when investing in the volatile meme coin market or to completely avoid this type of asset. By doing so, investors can protect themselves from significant losses and promote a healthier ecosystem for legitimate projects to thrive.