Meme coins a sign of 'speculative frenzy' in markets, famed short seller says

Meme coins a sign of 'speculative frenzy' in markets, famed short seller says

Meme Coins Surge as Trump-Backed Tokens Spark Market Frenzy

Meme coins have taken center stage in the cryptocurrency market, drawing both excitement and skepticism from investors. While some view these tokens as symbols of speculative excess, others see them as a lucrative investment opportunity—especially with high-profile figures entering the space.

"These things have no intrinsic value," warned Carson Block, founder of Muddy Waters Capital, in a recent interview with Yahoo Finance. "They’re just barometers of how much liquidity and speculative frenzy exist in the market right now—and all signals point to a lot."

Meme tokens, inspired by internet trends, artwork, or pop culture, have exploded in popularity. Some of the most well-known include Dogecoin (DOGE) and Shiba Inu (SHIB), both featuring dog-themed branding. However, the latest entrants into the market have come from an unexpected source: the White House.

Trump and Melania Launch Meme Coins

Just before taking office for his second term, President Donald Trump unveiled a meme coin, TRUMP-OFFICIAL USD, which quickly surged in value. The coin’s market capitalization now exceeds $5 billion. First Lady Melania Trump followed suit, launching MELANIA-OFFICIAL USD, which initially peaked at nearly $5 per coin before settling around $2.30.

These high-profile endorsements have intensified the meme coin craze, but not everyone is convinced of their staying power. David Einhorn, founder of Greenlight Capital, mocked the speculative frenzy, noting that the market has reached the "Fartcoin stage"—a reference to an actual meme coin of the same name.

"To short something in the midst of a speculative frenzy is a really bad idea," Block added. "When it’s untethered from reality, it can drift even further before it finally crashes back down."

Warnings from Wall Street

Notably, Anthony Scaramucci, founder of Skybridge Capital, has cautioned that retail investors could end up "holding the bag" on Trump’s meme coins as their values swing wildly.

Meanwhile, a legal disclaimer on both Trump and Melania’s coin websites states that the tokens "are not intended to be an investment opportunity, investment contract, or security of any type."

When questioned about his meme coin, Trump himself seemed unaware of its market performance, stating, "I don’t know much about it other than I launched it. I heard it was very successful. I haven’t checked it—where is it today?"

As the meme coin mania continues, investors face the age-old question: Is this the future of finance or just another speculative bubble?