The numbers are in: meme coins are, apparently, the only profitable crypto sector of 2025. A separate study found that meme coins had a favorable average Profit and Loss (PnL) during the first five months of the year. At the same time, other sectors could not get ahead. Using the click-to-mint feature, Pump.fun is cranking out millions of these digital gags a minute. Sounds like a party, right? Before you sell your house to buy DogeRocketMoon, let’s add a healthy splash of reality.

Hype vs. Hope: A Risky Game

The authors of the study conclude that meme coins provided an average PnL of +33.08%. Okay, not bad, but that's an average. Well… what does that actually mean for you, the retail investor?

Here's a harsh truth: 81.18% of meme projects resulted in losses. That's right. You’re basically gambling on your FID in a game of digital roulette where the house just so happens to have a gigantic advantage. The research further notes that 97% of memecoins were dead in 2024, with 9,900 tokens per day going to the graveyard on Pump.fun. Does that sound like an intelligent investment strategy to you? This isn’t investing; it’s gambling cloaked in blockchain hype.

Think about it like this: it's like opening a lemonade stand where 8 out of 10 people who try your lemonade get food poisoning. Would you still open that lemonade stand? Probably not.

The Dark Side of the Moon Tokens

This latest meme coin mania has unintended consequences that go beyond the individual investors who lost money. Every dollar of this capital rushing into coins named after internet cats is a dollar that’s not going to real innovations in the blockchain space. Projects that need goddamn skating polar bears, but they’re projects invented by someone else’s creativity.

We’re trading away the future of DeFi to…digital Beanie Babies. It's a tragedy of wasted potential. I am not saying that people shouldn't invest in memecoins but be very careful as I have seen lives being ruined by 'get-rich-quick' schemes.

Come June 2025, Pump.fun will be home to almost 6 million meme coins. This jaw-dropping statistic creates the perfect storm for fraudsters and market manipulators. With millions of new coins entering the market every day, doing basic due diligence is humanly impossible. How on earth can you research something when hundreds or thousands more are produced each and every day?

This manipulation-friendly environment allows nefarious actors to pump and dump scams or otherwise worthless tokens, often with regularized practices of leaving unsuspecting investors holding the bag. In many ways, it’s the Wild West of crypto and regulators are seeking to catch up.

Are We All Just Clowns Now?

I know, I know. You're thinking, "Erik, people are making money! It's fun!" And, yes, some people are making money. Just like some people win the lottery. But the odds are stacked against you.

Ask yourself: are you investing based on informed analysis or simply FOMO (Fear of Missing Out)? Are you tempted by the latest marketing gimmick and ads claiming overnight wealth?

Here's where the "Unexpected Connection" comes in: This meme coin mania reminds me of the dot-com bubble of the late 90s. Everyone was just throwing money at literally everything with a .com in the name, not caring at all what their business model was or how viable it was. The outcome? One of the largest crashes in history, erasing billions of dollars and leaving millions of investors scalded. Are we destined to repeat history?

Though the study’s methodological design sought to prioritize the integrity of the data within the study’s purpose, it was not without its limitations. Looking solely at the starting and ending value of a token over a short five-month window provides a misleading and inaccurate depiction. It fails to consider the extreme price fluctuation in that short time frame, the total trading volume, or the viability of these projects in the long run.

Leaving out tokens with no final prices (giving them a -100% PnL) would bias the findings. While it's a conservative approach, it might underestimate the true failure rate of meme coins, as many likely died a silent death before the study's endpoint. Are we getting the full picture from the data?

The Takeaway

While I’m not here to tell you to never mess around with a meme coin, don’t be afraid to pitch a small $100,000 “play money” project at one. But don’t forget, you can put it all at risk! Please don’t fool yourself into believing that it’s a great investment strategy.

The harsh reality is that meme coin success is mostly dependent on speculation, hype, and a lottery winner mindset. It is a reckless lottery with terrible odds stacked against them. Quit pandering to short-lived digital fads! Instead, get back to the basics of blockchain technology and focus on projects with actual promise.

Your financial future depends on it.