During his latest appearance on the Joe Rogan podcast, Elon Musk issued a warning aimed at crypto investors, warning them that meme coins are very similar to gambling.
What is particularly interesting, and what sparked a strong response from the wider crypto community, is the fact that Musk himself previously endorsed a certain meme coin called Dogecoin.
During the Joe Rogan Experience podcast, Musk said that investing in meme coins is “like a casino,” comparing those who dabble in crypto investments to the “Greater Fool Theory”, where the one “who sits last lossess”.
It’s like a casino or something like that. And then people just stick to the Greater Fool Theory, like musical chairs, and the one who sits last loses.
Moreover, Elon Musk also warned meme coin investors to be mindful when it comes to betting on digital assets that are yet to be proven, advising investors to steer away from meme coins and not pour their life savings into cryptocurrencies inspired by memes.
This is why Musk compared investing in meme coins with the greater fool theory which is based on the principle that you can profit by speculating on assets that are overvalued, consequently relying on the guess that someone else will pay a higher price.
What makes this strategy so volatile is that its success depends on there are new “greater fools” who are willing to pay increasingly higher prices for the said asset. As time goes by, investors have no choice but to accept the fact that the price doesn’t correspond with the value of the asset, leading to its price to plummet substantially.
Joe Rogan echoed Musk’s sentiment, stating that the hype for meme coins is illogical and irrational, further questioning why many people decide to invest their life savings into speculative assets.
