The 2023 Bitcoin Pizza Day, which commemorates the first-ever commercial transaction using Bitcoin, took an unexpected turn this year as meme coins surged in popularity. However, instead of celebrating the occasion, investors found themselves entangled in a web of rug pulls and honey pot schemes that cost them around $200 grand.
Unveiling the Meme Coin Mania
In recent times, the cryptocurrency market has witnessed a surge in meme coins, which are digital tokens that gain popularity based on social media trends rather than intrinsic value. These coins have gained attention due to their association with internet memes and the hope of quick profits. The rise of the latest meme coin mania can be attributed to the success of coins like Pepe, which reached a staggering $1 billion market cap
Pizza-Related Meme Coins Take Center Stage
On the 13th anniversary of Bitcoin Pizza Day, the crypto community witnessed a flurry of pizza-related meme coins flooding the market. According to data from Dextool’s “live new pairs” section, 14 pizza-themed meme coins were launched within a span of 24 hours during the event.
Unfortunately, four of these coins were confirmed to be rug pulls where developers deceive investors and siphon off their funds through various techniques. Additionally, five other coins raised suspicions of being honey pots, trapping buyers with unsellable tokens.
The Tale of Lost Investments
Among the pizza-related meme coins, Pizza Coin (PIZZA) was the first to emerge. However, its existence was short-lived, as developers quickly manipulated the sell tax rate, rendering investors unable to sell their holdings. This resulted in a total loss of 0.9892 ETH or around $1,800 for the 34 traders who purchased the token. Undeterred, investors flocked to tokens named Bitcoin Pizza and Pizza Inu, only to face losses exceeding $12,000 in total.
Continuing the trend, Ethpizza and Bpizza also entered the scene with the former achieving a market capitalization of $40,000 while the latter skyrocketed to over $100,000, capturing the attention of eager investors. However, both coins became unsellable after the contract owners halted transfers and sales, leaving investors stranded.
Inherent Risks of Meme Coins
The allure of meme coins lies in the hopes of catching the next hyped token, but they come with inherent risks that investors often overlook. One common risk is the manipulation of smart contracts, such as altering the sell tax rate, making the tokens impossible to sell. Another prevalent tactic involves token hoarding by the contract owners, who wait for prices to rise before selling into unsuspecting investors’ liquidity.
Meme coins, unlike traditional cryptocurrencies, lack fundamental value. They rely solely on social media trends and speculative trading, making them highly volatile and susceptible to rapid price fluctuations. Moreover, the decentralized nature of cryptocurrencies makes it challenging to regulate these coins effectively, leaving investors exposed to potential scams and fraudulent activities.
Final Thoughts
The 2023 Bitcoin Pizza Day, which should have been a celebration of a milestone in the adoption of cryptocurrencies, was overshadowed by the influx of pizza-related meme coins and a series of rug pull incidents. These unfortunate events should further serve as a warning that while meme coins may offer a temporary thrill and the promise of quick profits, investors must always exercise due diligence and conduct thorough research before diving into this speculative market. Ultimately, understanding the risks associated with meme coins is crucial to safeguarding one’s investments and maintaining a sustainable crypto ecosystem.
Giancarlo is an economist and researcher by profession. Prior to his addition to Blockzeit’s dynamic team, he was handling several crypto projects for both the government and private sectors as a Project Manager of a consultancy firm.
