Billionaire investor and tech entrepreneur Mark Cuban has sparked ire from the meme coin community with his recent remark, labeling all meme coins as potential exit scams with no real-world utility. His statement conflicts with his public support and love for the OG meme coin, Dogecoin.
Mark Cuban: Meme Coins Are Rug Pulls
During a recent appearance on the Rug Radio podcast, Shark Tank investor Mark Cuban described meme trading as a game of “musical chairs” whereby all participants gamble. Cuban observed that meme coins can entail strong communities but don’t have staying power.
“Every single meme coin is a rug pull in the works, right? Because there’s no real reason for it to stick around other than the fun of it and to see when the token goes up in value because more people came in,” the billionaire told his interviewer.
Cuban also postulated that the meme coin market is basically buoyed by the Greater Fool Theory — a market thesis that states that investors can buy assets without any fundamental bullish factors and still offload the assets to another investor at a profit. The investor who buys the overvalued asset can then repeat the process by getting another individual who will cough out even more money for the asset based on the same assumption that they can sell the asset at a profit to someone else willing to pay more.
“Part of the game in meme coins is to time it to see if you’re going to make or lose money,” Cuban explained. “It’s like flipping a coin; it’s like playing roulette. Nobody is so stupid to think this is a great investment — even if they all go on Reddit or Telegram and say: ‘This is the best meme coin ever. To the moon baby!’”
Shiba Inu advocate Abraham Naidoo contended that SHIB doesn’t fit in this classification. He cited ongoing developments like Shibarium — the crypto’s Ethereum layer-2 blockchain — and ShibaHUB, stressing that these projects make Shiba Inu more than just a meme.
Even if that was true I would rather put my money in meme coins than anything @mcuban has to offer
— Galyan (@galyan1018) October 3, 2024
So, Is Dogecoin Also A Rug Pull?
Despite stating that all meme coins were rug pulls, Cuban has regularly voiced strong support for Dogecoin, the top doggy-themed meme coin. Earlier this year, the famous billionaire investor revealed that the Dallas Mavericks, the NBA team he previously owned, still accepts Dogecoin as a payment for merchandise purchases.
He also previously asserted that DOGE has more potential applications than Charles Hoskinson’s Cardano (ADA). Even in his recent interview with Rug Radio, Cuban said he saw the utility of Dogecoin.
“And then there’s Dogecoin, which is more for fun and community,” he said. “It just really depends on where you’re at. And I’m a proponent of all of them. I see the fun in it, I see the utility in it, and I see the store value of it. So it really depends on where you want to go.”
Cuban’s comment about meme coins being rug pulls is likely about smaller cap tokens like those debuted on launch pads such as Pump.fun. Such coins are often pump-and-dump schemes that never garner any substantial traction.
Meanwhile, Dogecoin has attracted the attention of even the world’s richest man, Elon Musk. The Tesla CEO admitted earlier this year that he has a “soft spot” for the canine-themed cryptocurrency.
