Why Do You Always Lose the Meme Coin Trade? Galaxy Reveals
The post Why Do You Always Lose the Meme Coin Trade? Galaxy Reveals appeared on BitcoinEthereumNews.com.
A new Galaxy Research report finds that the primary beneficiaries of the meme coins are not the traders, but the infrastructure providers. Platforms such as launchpads, decentralized exchanges (DEXs), and automated trading bots capture substantial revenues. Meanwhile, the majority of individual participants incur losses in what is called a zero-sum game with negative expected value (EV). The Meme Coin Paradox: Mass Participation, Concentrated Profits Sponsored Sponsored Meme coins, often described as tokens created around internet jokes or cultural trends with no utility, have been around for over a decade. Notably, the surge in popularity and ease of creation has sparked a full-scale boom. Millions of new tokens have flooded the market in the past few years. Traders are frequently drawn to this space by the promise of quick profits. Nonetheless, Galaxy Digital noted that, “Trading them is less about fundamentals and more about what can be described as ‘cultural arbitrage’: predicting or front-running attention cycles, e.g., buying the token for a viral TikTok trend before the market recognizes it is viral. In the long run, the vast majority of market participants end up losing money trading meme coins, and in many respects, it’s just plain gambling.” In the latest report, Galaxy Digital’s research analyst Will Owens explained that the meme coin ecosystem functions as a stack. Here, the flow of money is mostly concentrated in the infrastructure that supports creation and trading. Meme Coin Ecosystem Structure. Source: Galaxy Digital At the base level, blockchains like Solana dominate. It hosts over 32 million tokens, a more than 300% increase since early 2024. The blockchain accounts for 56% of the 57 million meme coins across major chains, including Ethereum, Base, and BNB Chain. “Base and BSC also host significant activity, while Ethereum hosts bigger tokens and a less cutthroat culture,” the report…
