Balaji Condemns Memecoins as ‘Zero-Sum Lottery’ Amid TRUMP Token Surge
Balaji Srinivasan, the former CTO of Coinbase and general partner at venture capital firm Andreessen Horowitz, has voiced strong criticism against the memecoin market, calling it a “zero-sum lottery” in a recent thread on X. His remarks came as TRUMP, the official memecoin tied to Donald Trump’s second presidential run, nears a market cap of $10 billion, while Melania Trump, the incoming first lady, launches her own memecoin.
“There’s no real wealth creation,” Balaji tweeted, arguing that memecoins operate on a zero-sum basis. “Every buy order is matched by a sell order. After an initial surge, the price collapses, and the last buyers lose everything,” he said, labeling memecoins as a “negative-sum lottery” once exchange fees are taken into account.
Balaji emphasized that memecoins should be viewed similarly to gambling in Las Vegas—something meant for short-term entertainment rather than long-term investment. “Investors should focus on assets that retain their value over time,” he advised, adding that while it is possible for some memecoins to develop real use cases or remain in the headlines, the risks remain high.
When asked if Bitcoin could be considered a memecoin, Balaji argued that it is fundamentally different. “Bitcoin is the base layer of a blockchain with around 800 Th/s of hashrate spread across thousands of datacenters,” he explained. “It grew gradually and steadily, not through speculative price spikes, and its mining issuance schedule ensures no single party can sell too much.”
Meanwhile, the surge in interest around TRUMP has begun to drain liquidity from other memecoins, with CoinGecko reporting an 8% decline in the overall memecoin market over the past 24 hours. Major tokens like DOGE, SHIB, and BONK have seen losses of more than 10%, underscoring the speculative nature of the market that Balaji warns investors to be cautious of.
