A fringe cryptocurrency’s astonishing price rise of more than 1,500 per cent in less than a week has once again put the spotlight on meme coins.
While bitcoin fell by a further 7 per cent on Thursday, dragging most of the rest of the crypto market down with it, Tiger King Coin (TKING) more than doubled in value.
Ranked the 2,561st most valuable cryptocurrency in the world, Tiger King Coin is far from alone in being a token based on a meme or pop culture reference. Price index site CoinMarketCap lists close to 100 so-called meme tokens, with a combined market cap of more than $33 billion.
They range from the rude – CumRocket, Dick and PooCoin – to the completely uninspired, such as MemeCoin and MemeToken.
But while their names may be varied, crypto market experts warn that their utility is nearly uniformly pointless.
“These are not investments, these are just Ponzi schemes and the last one out will be the person who gets hurt the most,” Fred Schebesta, crypto investor and co-founder of the comparison platform Finder.com, told The Independent.
“There’s a bit of fun in it, but you’re actually dealing with real money. The only person who’s winning here is the person who makes the coin and the person who sells on to the other people [before it collapses]. All of these will go to zero, or as close to zero as possible, because it’s a phase.”
The one exception to this pattern, according to Mr Schebesta, is the original: Dogecoin.
“There’s too much history for it to die,” he continued. “It’s gone way too far. Dogecoin is baked into culture... it has seeped into the culture of humanity as the original joke cryptocurrency. I think it will just carry on forever.”
Tiger King Coin is based on the hugely popular Netflix series of the same name, and claims to have the support of controversial lead character Joe Exotic. However, it is not even the only cryptocurrency to emerge from the show, after Exotic’s rival Carole Baskin launched her own $CAT coin.
Backers of both hope that the release of a new season of Tiger King will help push their price up even higher.
“In the short term, people who betted on them may make some money, but these are largely Ponzi schemes and when they go back to the value that they really should be at – which is zero, or very close to zero – then people at the bottom of the scheme then suffer,” said Dr Iwa Salami, a senior lecturer in financial law at the University of East London.
“The annoying thing is that it affects the credibility of the entire industry.”
It is a sentiment echoed by Antony Portno, founder of Traders of Crypto, who says that the crypto market is becoming “convoluted by bandwagoning ‘meme’ coins that seem to lack the fundamentals” of a serious project.
“Cryptocurrencies, in their purest form, are revolutionary and will do to money what the internet did to data, but these sorts of coins (like TigerKing Coin) is what is making the industry look like a playground,” he said.
“There are so many nonsense coins, if you are getting into crypto it is absolutely crucial that you do your due diligence and make sure you make well-informed decisions based on good information and data. Following the crowd isn’t always the best thing to do and there is value to be had, but I would say it is best to avoid joke coins like this.”