So, memecoins are "winning" in 2025, huh? Outperforming everything else on the crypto market according to a recent ChainPlay study, they’ve been the only crypto sector bringing positive returns year-to-date. A juicy +33.08% avg PnL from January to May. In the meantime, AI, Layer 2, heck even NFTs are swimming. That's the headline. But hold up before you mortgage the house and YOLO into DogeElonMarsInu.

Are Memecoins Crypto's Canary In Coalmine?

Look, I get it. We're all looking for that moonshot. That get rich quick scheme that’ll allow us all to finally flip our bosses the bird. And in this pursuit, memecoins—blanks checks with silly names and viral appeal—look like the ideal vehicle. Let's be honest with ourselves. The core value proposition of most memecoins is… In fact, there isn’t one. They flourish on tax payer boondoggles, on cronyism, on hype, on speculation, on the greater fool theory. Someone always gets left holding the bag.

And that’s where the surprising connection enters the picture. This crypto-meme-mania extravaganza makes me think of the dot-com boom. Remember Pets.com? Companies with such an unsound business model, baked by all the irrational exuberance in the world, only to crash and burn spectacularly. Are memecoins crypto's Pets.com? Or are they an indicator that the market is miscalculating its fundamental value? Rather than trying to create something durable, have they just moved on to the next shiny object? It's a valid question to ask!

The harsh reality is that tech sectors such as AI and Layer 2 are blowing it, BIG time. It’s enormously disheartening. These are the technologies that are meant to lead real-world adoption and innovation in the blockchain space. AI can transform everything from compliance and due diligence to data analysis to smart contracts to discovering and remediating risk. Layer 2 solutions will play a significant role in scaling Ethereum and bringing DeFi to the masses. If folks are spending their money on Shiba Inu and not these projects, that’s a problem. It’s the equivalent of investing in Beanie Babies as opposed to the internet.

Diversification Or Neglecting Real Innovation?

The case for memecoins as the “brilliant diversification” rests on shaky arguments. Others will counter that they introduce more newcomers into the crypto ecosystem. That they’re a candy cane indicator of more consequential stuff to come. Maybe. I’d contend they’re doing more to frighten consumers off when they eventually lose their cash on a rug pull. According to one ChainPlay research, as of June 11 2025, almost 5.9 million new meme tokens had been created on Pump.fun alone. That’s more than tenfold compared to the 540,000 new tokens listed on all decentralized exchanges combined by April 2024. That's insane!

Moreover, it is purported that 18.82% of memecoin projects were profitable ventures. Which is great! But remember that RWA had a much higher bar for failure! It’s been all too easy to get swept up in the hysteria of a behind-the-scenes, secretly inflating asset. But it’s far more difficult to spot the emotional toll it takes.

Yes, I know the counter-argument. "Don't hate the player, hate the game." I’d submit that rather than hating the player, we should hate the game—or at least work to change the game. We need to find ways to create incentives for projects that are creating real long-term value and not just projects taking advantage of passing fads. We need to educate people about the risks of memecoins and encourage them to invest responsibly.

Don't Let Greed Blind You

Here's the truth: anyone telling you that memecoins are a sure thing is either lying or delusional. They're a gamble, plain and simple. There’s nothing wrong with taking a gamble—but you have to know the odds. Our related research found that 78% of crypto investors bought the president-endorsed memecoins. About 66% of these investors subsequently lost their money due to extreme volatility and pump-and-dump maneuvers. That's a scary statistic.

Despite LIBRA only representing 8% of total ETF flows it had the highest loss rate at 75%. This alarming number pushed 21% of new buyers to exit the cryptocurrency space, acting as an alarm signal. This isn't a game. This is not monopoly money, and you can lose it just as quickly as you can make it.

Are memecoin profits an early indicator for crypto’s future? Maybe. Maybe not. They definitely underscore the call for a more holistic and sustainable approach to investing in this space. Don't let greed blind you. Do your research. Invest in projects with real value. And for Doge’s sake, please don’t invest all your money into the DogeElonMarsInu project. Because when that bubble bursts, and it will burst, it’s going to sting.