The founder and CEO of the investment management firm ARK Invest is warning the public of the risks of trading memecoins.
In a new interview on Bloomberg Crypto, Cathie Wood says that the U.S. Securities and Exchange Commission (SEC) did an important thing in declaring that memecoins are not securities.
“What they essentially were saying is we are not going to regulate them and it’s buyer beware, so I have one message for those listening who are buying memecoins, buyer beware. I think the message is loud and clear from the regulators.”
She says that many memecoins will eventually lose their value.
“What we think will happen is there will be some fearsome declines in the prices of some of these meme assets and there’s nothing like losing money for people to learn. Now learn that the SEC and regulators are not taking responsibility for these memecoins.”
Wood says that while the leading crypto assets are bound to become more valuable, this is not the case for the large majority of memecoins.
“The millions of memecoins will probably end up worthless. When we’re talking about the big three – Bitcoin, Ethereum, Solana, the use cases for those are multiplying and we think they’re going to become very important in the years ahead. Memecoins, not so.”
Wood also shares her thoughts on whether President Donald Trump’s memecoin will also become worthless.
“Memecoins will be collector’s items – digital collector’s items. Of course, some will withstand the judgment of time and that may be one of them, but our working assumption is that when you’re talking about millions of memecoins, you know that that’s just a step too far and most of them are not going to be worth very much.”
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