As the official memecoin of the second Donald Trump presidency flirts with a $10 billion market cap and Melania Trump, the next first lady, launches her own, Balaji Srinivasan, the former CTO of Coinbase, said in a thread on X that the whole this category of tokens could be equated with gambling.

“There is no wealth creation. Each buy order is simply matched by a sell order. And after an initial rise, the price eventually falls and the last buyers lose everything,” he wrote, calling memecoins a zero-sum – even negative amount after exchange fees – lottery.

Balaji said memecoins should be approached in the same way as gambling in Las Vegas for entertainment purposes.

“Most people should buy assets that will retain their value over the long term,” he continued. “It is sometimes possible to add use cases to a memecoin, or to keep it in the headlines to keep its value up indefinitely. And we have seen examples of that as well.”

In response to the post, many asked Balaji if bitcoin was ever considered a memecoin, to which he argued that it was not due to its use cases and decades-plus staying power.

“Bitcoin is the base layer of a blockchain with ~800 Th/si hashrate across hundreds of data centers worldwide,” he wrote. “It grew gradually over time, rather than all at once, and the mine issuance plan limits how much can be sold by a single party.”

Market interest in the official Trump memecoin has drained liquidity from other memecoins, with CoinGecko data reporting that the category has shrunk by 8% in the last 24 hours. Many of the top memecoins like DOGE, SHIB and BONK have dropped over 10% on the day.

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