Ryan Watson, a 29-year-old landscaper and cryptocurrency investor from Binghamton, N.Y., slept through the Oscars, including the infamous moment when Will Smith slapped Chris Rock. But two days later, he was elated to see what the event had spawned: a memecoin, dubbed Will Smith Inu.<\/p>\n<\/div>\n
The slap\u2019s near-instantaneous minting into coin didn\u2019t come as a surprise. Memecoins are cryptocurrency tied to viral moments and Internet jokes, with a fleeting value that tends to rise and fall quickly. Some currencies, like Dogecoin and Shiba Inu, have endured and are accepted by Tesla and GameStop as payment. Most, like Space Kim \u2014 a token satirizing North Korean leader Kim Jong Un \u2014 are jokes, a risky investment without any tangible purpose.<\/p>\n<\/div>\n<\/div>\n
But those who get in early can walk away with a tidy profit. Which is why, two days after the Oscars, Watson bought $5,000 worth of Will Smith Inu. The coin garnered more than $3 million in trading, collapsing back to nearly zero within a week. Its temporary rise worked well for early investors like Watson, who cashed out with $20,000, but for thousands of others, it prompted a furious sell-off<\/a>, with people trying to recover what little they could of their initial investment. \u201cScared money don\u2019t make no money,\u201d Watson said.<\/p>\n<\/div>\n Watson says he can\u2019t worry too much about the folks who didn\u2019t sell <\/b>early. \u201cIt\u2019s like, why would I stop when it\u2019s changing my life?\u201d he said. \u201cJust because other people lose money?\u201d<\/p>\n<\/div>\n Once considered a humorous version of cryptocurrency, the sector is now rife with scams, critics and former memecoin moguls note, making it a particularly dangerous product that provides a bounty for few at the cost of many. Nearly all analysts agree that participation is essentially a form of gambling.<\/p>\n<\/div>\n \u201cIt\u2019s a zero-sum game,\u201d said David Hsiao, chief executive of the crypto magazine Block Journal. \u201cIf somebody is getting rich, a lot of other people are losing money.\u201d<\/p>\n<\/div>\n An ex-cop fell for Alice. Then he fell for her $66 million crypto scam.<\/a><\/span><\/p>\n<\/div>\n By most accounts, memecoins came into existence around 2013, as an image of a talking Shiba Inu puppy called Doge was gaining viral fame. A pair of software engineers released a themed digital currency. Called Dogecoin, it was intended to satirize the cryptocurrency market.<\/p>\n<\/div>\n But in 2021, with crypto veering toward mainstream acceptance, the sector began booming. Experts said the rise was due to a confluence of factors: Redditors had inflated GameStop\u2019s stock much to Wall Street\u2019s surprise, giving energy to outsiders who felt empowered by the idea that they, too, could manipulate financial markets. Fueled in part by high savings rates during the pandemic, many had expendable income, making them more comfortable with risky investments. And notable personalities, such as Elon Musk, touted meme currency, like Dogecoin, online.<\/p>\n<\/div>\n Billy Markus, the creator of Dogecoin, signaled his distaste with memecoins in February, writing on Twitter<\/a> that they have become filled with spam advertisements, lies about founders, oversize promises and desperate attempts to capture Musk\u2019s attention for promotion.<\/p>\n<\/div>\n \u201cCurrent \u2018meme\u2019 coins aren\u2019t even memes,\u201d he added. \u201cThey\u2019re made by people trying to get rich off of other people trying to get rich.\u201d<\/p>\n<\/div>\n Crypto tax: \u2018MiamiCoin\u2019 has made the city $7 million so far, a potential game-changer for revenue collection<\/a><\/span><\/p>\n<\/div>\n These days, there are more than 300 memecoins, according to statistics from the crypto website CoinMarketCap<\/a>. As of April, their value hovers around $32 billion, garnering roughly $2 billion in daily trading volume.<\/p>\n<\/div>\n Ethan McMahon, an economist for the crypto research firm Chainalysis, said that many memecoin investors don\u2019t care about the financials of any particular coin. The main goal is to find a meme coin early based on a moment that\u2019s trending, buy a large block of it before others catch wind and, when people flock to it, get out before the public\u2019s attention wanes and the coin crashes in value.<\/p>\n<\/div>\n \u201cIt\u2019s musical chairs,\u201d McMahon said. \u201cPeople think that they\u2019re going to be able to get in before the house comes crumbling down.\u201d<\/p>\n<\/div>\n For investors like Watson, the dangers simply allow him access to a host of benefits: financial freedom, a quick profit and a way out of a traditional career path and authority.<\/p>\n<\/div>\n \u201cI don\u2019t want a 9-to-5, man. I really don\u2019t. I\u2019ve always struggled with authority,\u201d Watson said. \u201cNo matter how much time I put in [a job], I never moved up. \u2026 That\u2019s why I\u2019m doing things like this.\u201d<\/p>\n<\/div>\n Cryptocurrency is suddenly everywhere \u2014 except in the cash register<\/a><\/span><\/p>\n<\/div>\n But with the right software, anyone can make a memecoin for a few hundred dollars in a few minutes, driving up opportunities for scammers, experts noted.<\/p>\n<\/div>\n Coin creators can control how many coins are minted, often allowing for sky-high amounts \u2014 in the billions or trillions \u2014 ensuring the value of each single coin is far less than one cent and making the barrier to investing in a coin incredibly low. (On Oscars night, investors could pick up a Will Smith Inu coin for around $0.0000002176.)<\/p>\n<\/div>\n One of the more common scams, called a rug pull \u2014 where coin developers solicit investment in their coin and suddenly abandon it by selling their large stake, cratering the coin\u2019s value to zero for others \u2014 has caused havoc for everyday investors in recent years.<\/p>\n<\/div>\n In November, creators of a memecoin based on the Netflix series \u201cSquid Game\u201d let their coin rise in value over 11 days to $2,860 and then left the project<\/a>, driving its price down to nearly zero and walking away with $3.3 million in investors\u2019 funds.<\/p>\n<\/div>\n