Mark Cuban: Meme Coin is a Rug Pull Scheme
Mark Cuban, a prominent businessman and investor from the United States, recently expressed his views regarding the meme coin phenomenon, which he considers a "rug pull scheme", although he will still support Dogecoin.
“Every meme coin is a rug pull scheme in progress, right? Because there is no strong reason for them to survive except for pure pleasure. "Meme coin is just a musical game," explained Cuban in a Rug Radio podcast with Farokh Sarmad on Thursday (3/10/2024).
Cuban's view seems to highlight meme coins with low market capitalization that often lack the backing of large investors or established companies—such as Dogecoin which is backed by high-profile figures like Elon Musk and Cuban himself—and thus are vulnerable to extreme price volatility.
Cuban also explained that the meme coin market is based on the Greater Fool Theory, which states that investors can buy assets without paying attention to fundamental factors, with the hope of reselling them to someone else who is willing to pay a higher price.
Nevertheless, Cuban stated that he still supports Dogecoin and sees it as an exception. He considers Dogecoin to have wider potential use than most other meme coins.
“Dogecoin is more than just fun, it's also about community. It all depends on your goals. I support this because I see elements of entertainment, utility, and even potential value storage."
On the other hand, the meme coin phenomenon seems to have become one of the most striking trends in the crypto world. According to data from CoinGecko in June 2024, the meme coin sector recorded the highest profits, with a return rate reaching 2,405.1% in the first half of this year.