CZ Warns Investors Against Hype-Driven Memecoin Investments

Changpeng Zhao (CZ), the founder of the prominent crypto exchange, has recently raised caution against investment in meme coins. Hence, Changpeng Zhao has advised the crypto investors to be careful, while highlighting the risks resulting from blindly following momentary social-media trends. In his exclusive X post, CZ revealed that investing in the crypto tokens that emerge due to a few tweets could be dangerous and lead to huge losses. The statement comes at a time when the hype-driven tokens are swarming the market.

Changpeng Zhao Highlights Risks in Memecoin Investment

Additionally, Changpeng Zhao (CZ) clarified that he does not dislike meme coins, but there is a notable risk in investing in such hype-led tokens. CZ added that the majority of such tokens emerge from the short-term social media trends. As a result of this, several tokens make massive profits. However, the same projects experience notable blows as soon as the hype fades.

Keeping this in view, CZ’s advice specifically targets the new market entrants, as they are more prone to getting swindled by such hype-based meme tokens. In addition to this, the respective coins also lack an intrinsic value, making them more vulnerable to sudden collapse and sheer price fluctuation. Thus, CZ persuades the investors to exercise caution and do proper research before any investment decision.

Binance Founder Advises Due Diligence against Volatile Tokens with No Intrinsic Value

According to CZ, the memecoins are mostly short-lived, leading to large-scale losses. Therefore, amid the ongoing memecoin hype, the investors should not bet their money on momentary the tokens that can just achieve a momentary spike before collapse. Moreover, rather than investing in speculative memecoins, they should leverage the assets with real value.