Balaji Rips into Memecoins, Calling Them a ‘Zero-Sum Lottery’ as TRUMP Token Fuels Market Madness.

Balaji Criticizes Memecoins as ‘Zero-Sum Gamble’ Amid TRUMP Token Surge

Balaji Srinivasan, the former CTO of Coinbase and general partner at Andreessen Horowitz, has expressed strong criticism of the growing memecoin market, calling them a “zero-sum lottery” in a recent post on X. His remarks come as TRUMP, the official memecoin associated with the second Donald Trump presidency, nears a $10 billion market cap and Melania Trump, the future first lady, launches her own memecoin.

“There is no real wealth creation,” Balaji stated, explaining that memecoins are essentially a gamble. “Every buy order is matched by a sell order. After the initial spike, the price crashes, and the last buyers lose everything,” he wrote, referring to memecoins as a “negative-sum lottery” once exchange fees are factored in.

Balaji went on to suggest that memecoins should be treated like a form of entertainment, akin to gambling. “Most people should be focused on acquiring assets that hold value over time,” he advised, while acknowledging that a few memecoins could potentially maintain their value if they manage to build a use case or stay in the public eye.

When asked if Bitcoin could be considered a memecoin, Balaji firmly disagreed, citing Bitcoin’s foundational role in the blockchain ecosystem. “Bitcoin is the base asset of a blockchain with approximately 800 Th/s in hashrate across a global network of data centers,” he explained. “It grew steadily over time, not through sudden price spikes, and its mining issuance schedule restricts the amount any single entity can sell.”

Meanwhile, the surge in demand for TRUMP has caused liquidity to shift away from other memecoins. CoinGecko reports that the overall memecoin market has dropped by 8% in the last 24 hours, with leading tokens such as DOGE, SHIB, and BONK seeing losses of over 10%. Balaji’s warnings about the speculative nature of these assets have become even more pertinent as the market reacts to the TRUMP token’s rise.