Shark Tank star Mark Cuban is a famous supporter of Dogecoin, the original crypto meme coin. However, in a recent interview, the billionaire entrepreneur and investor said that he believes that “every meme coin is a rug pull in the works”—but that is also what makes them fun. 

Meme coins are extremely volatile crypto tokens largely motivated by sensational hype as traders speculate on their price. They're often based on internet memes, public figures, or world events, though we've seen some coins vault to prominence via hacked celebrity accounts... or from a dev setting himself on fire.

Ultimately, very little holds up the price of these assets. Moo Deng is just a cute baby hippo, not the future of finance. Nobody should have any illusions about that.

“Every single meme coin is a rug pull in the works, right? Because there's no real reason for it to stick around other than the fun of it,” Mark Cuban told Farokh Sarmad of Rug Radio, Decrypt’s sister company. “Meme coins are all a game of musical chairs.”

Cuban has previously been a vocal supporter of Dogecoin, going as far as accepting Dogecoin as payment for merchandise purchases with the Dallas Mavericks, the NBA team that he previously owned. He later claimed that Dogecoin has more potential applications than Cardano, a layer-1 blockchain started by Ethereum co-founder Charles Hoskinson.

He still speaks positively of Dogecoin even now. In the interview, he discussed the various major coins and their perceived benefits, whether it's Bitcoin as a store of value and hedge against fiat currency, or Ethereum with the capabilities of smart contracts to power decentralized apps (dapps). But in his eyes, there's value to Dogecoin too.

"And then there's Dogecoin, which is more for fun and community," he said. "It just really depends on where you're at. And I'm a proponent of all of them. I see the fun in it, I see the utility in it, and I see the store value of it. So it really depends on where you want to go."

Cuban's remark about meme coins being rug pulls is likely referring to lower-market cap tokens, like those launched on protocols like Pump.fun and Moonshot, as these projects have much less backing from major players and companies. Most of these coins have a quick rise and fall, and almost never gain any significant traction. Very few of these coins really hang around for long.

While Dogecoin has the support of Twitter and Tesla owner Elon Musk as well as other prominent backers like Cuban, smaller tokens may get a few social media posts from an influencer before they move on to another coin.

“Part of the game in meme coins is to time it to see if you're going to make or lose money,” Cuban explained. “It's like flipping a coin; it's like playing roulette. Nobody is so stupid to think this is a great investment—even if they all go on Reddit or Telegram and say: ‘This is the best meme coin ever. To the moon baby!’”

He draws parallels between meme coin trading and gambling—a potentially attractive prospect in the U.S. given that some states ban gambling. On meme coin factory Pump.fun, the chance of a token launching beyond a $69,000 market cap hovers around 1.5%. This is comparatively low in contrast to most casino games, although traders can still potentially make money on coins that never reach that modest level.

“I'm not going to lie: I look at them too,” Cuban admitted of meme coins, mocking his own mindset when trading. “‘Should I buy some? No, don't be stupid. Don't be stupid.’ But, you know, it's like flipping a coin and hoping it comes up. It's just a game.”

Edited by Andrew Hayward