Peter Brandt warns crypto investors about investing in meme coins

Peter Brandt, a seasoned financial trader, has issued a stark warning to cryptocurrency enthusiasts, particularly those investing in meme coins. In a post on X, he pointed to the growing threats associated with speculative crypto-assets.

Brandt pointed out that Bitcoin’s value had increased from $0.07 in 2010 to its current value. However, he said that such a steep rise is not expected in the future. He also noted that many young investors, especially millennials and Gen Z, are counting on such gains from “ trash coins”.

I say this having witnessed markets for 50 years. Some will do great from here forward. But too many fools will get too leveraged, miss the top and get blown out in the next 50% correction in BTC, 90% correction in altcoins, 100% correction in memes https://t.co/o33Jnq4IHz

— Peter Brandt (@PeterLBrandt) January 6, 2025

Although he remains a Bitcoin holder as a store of value, given its performance, he worries about the current speculative behavior in the rest of the crypto market. Meme coins and altcoins have attracted investors’ interest, but Brandt noted their lack of utility and high volatility are problematic. He noted that speculative trends usually result in the formation of unsustainable bubbles in the market, which can easily burst and cause investors to lose a lot of money.

Debt-driven investments amplify risks

Brandt has noted that most investors are using high levels of debt to pursue gains in speculative assets. He calls this approach risky and dangerous in the event of market reversals.

He claimed that if the cryptocurrency market experiences a correction, Bitcoin may drop by 50% and altcoins by 90%.  He further noted that meme coins could be completely eliminated from the market since they are only based on speculation.

While Brandt can be considered an outright skeptic, he does not completely write off the crypto space. In another tweet, Brandt revealed his holdings of cryptocurrencies. Despite confirming that he holds Bitcoin and Solana (SOL), an Ethereum rival sometimes called an ‘ETH killer,’ he remained rather conservative.

“Go ahead, call me a hater (I own Bitcoin & SOL).”

Brandt

However, Brandt noted that his attention is now on traditional markets for profit and jokingly named Kleenex stock as one of his potential investments.

Adding to this discussion, a recent article by Cryptopolitan noted meme coins were the most popular category in the crypto market in 2024. The article noted the total market capitalization of memecoins increased by 500% during the year. In January, the memecoins started at around $20 billion and reached over $120 billion by December.

What began as a joke with Dogecoin turned into a serious sector supported by institutions and became mainstream. New entrants like Andy Eth and Chill Guy posted increases higher than 47,000%. The early investors of these projects witnessed a great increase in their portfolios.

“The memecoin phenomenon extends beyond mere speculation, representing a new form of social coordination and value creation. Their success challenges traditional notions of intrinsic value and asset fundamentals….and can be as powerful as traditional financial metrics.”

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