Pump.fun co-founder says altcoins mirror memes' goal

Pump.fun co-founder Alon Cohen has raised concerns about the value of most tech altcoins, suggesting they share the same purpose as memecoins in the cryptocurrency market.

In a post on X, Cohen stated that many altcoins are characterised by low float, high fully-diluted value, and heavy involvement from venture capitalists.

These venture capitalists, according to Cohen, often use retail traders as exit liquidity.

The statement came as Cohen responded to a suggestion that the launch of memecoins disrupted the altcoin price cycle.

He pointed out that Pump.fun had launched months before the altcoin sector's downturn, which began in April 2024.

"Retail was burned too hard last cycle to just come back to invest in the 'future of finance,'" Cohen said, explaining the altcoin crash.

Cohen further emphasised that most people, particularly those with day jobs, are not as concerned about tech and innovation.

"They care about personal fulfillment," he said, noting that many just want to make a modest amount of money while having fun trading.

The discussion sheds light on the growing divide between tech-based altcoin investors, who focus on utility, and traders who are more interested in speculation.

Pump.fun, which launched in January 2024, entered an already thriving memecoin market fueled by online communities on platforms like X, Reddit, and Telegram.

Despite the initial success, the altcoin market saw a sharp collapse in April 2024.

Prices didn't recover until November 2024, when a rally occurred in response to the re-election of Donald Trump.

Many analysts have noted that the cryptocurrency market is becoming oversaturated, with too many altcoins competing for limited attention and investment.

However, altcoins backed by institutional investors have generally performed better than those without such backing.