Memecoins like Fartcoin are riding Trump's victory to huge valuations. Experts say it may have only begun

cnbc.com:

Yes, it's called Fartcoin. Yes, it is totally useless.

And yes, it has nevertheless tripled in value over the past week to a market capitalization of more than $700 million — about equal to those of Office Depot, Guess jeanswear, and the parent company of Steak N' Shake.       

The carnival-casino era of cryptocurrencies has come back with a vengeance, riding a broader wave of investment in bitcoin that was itself spurred by the election of Donald Trump. It's minting millionaires while potentially harming others — yet everyone, even the losers, seem to be in on the joke.

The wave of «memecoiners» is a mix of longtime bitcoin holders and people simply desperate to change their fortunes in an era of sky-priced homes and equities, according to Toe Bautista, research analyst for GSR, a decentralized finance group. While many memecoin traders, flush from gains thanks to bitcoin's 130% increase this year — 50% of which has come since Trump's election last month — are simply «moving down the risk curve» into areas of pure speculation, Bautista said. Others see the potential of making 10 times their money overnight.

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«A lot of it is people thinking, 'I can get some sort of edge by having a better chance at a lottery ticket,» Bautista said.  

Memecoin buyers and sellers alike are, for the most part, aware that their trading activity amounts to the riskiest kind of gambling, Bautista said. It's all about exiting one's position to avoid getting left with «holding the bag» and failing to trade up and strike while the price is hot.

«Because they're worthless, you're betting on the 'greater fool,'» he said, referring to the idea that someone else will pay a higher price for a given memecoin. «You're thinking, 'I'm