The cryptocurrency market is very erratic. Cryptocurrencies’ prices can change significantly in a short amount of time. Memes provide a fun, amusing outlet for people to vent their feelings and deal with the ups and downs of the market.
Meme coins are digital currencies that can be illustrated with humorous or animated memes and are frequently supported by a passionate crypto community. They are highly reliant on online forums and social media. They enable people to swiftly express complex concepts or feelings in a way that the rest of the community can understand.
Although trading these coins might be entertaining, they also carry many risks and might not have much underlying worth. We will discuss what meme coins are in this article and some potential advantages and disadvantages of trading them.
What Do Cryptocurrency Meme Coins Do?
A type of cryptocurrency known as meme coins built on amusing visuals or animations. Typically, they develop to draw in crypto traders and investors and encourage more significant interaction and trading activity. Although most of these coins lack their blockchain, the crypto community has enthusiastically accepted them.
However, the purpose of meme coins goes beyond straightforward enjoyment. They can also allow investors to diversify their holdings and profit from price increases brought on by increasing demand
When Dogecoin, a mockery of Bitcoin and other cryptocurrencies, was developed in late 2013, meme coins first appeared on the cryptocurrency market.
It was intended to be joke money at first, but it quickly gained popularity and started to be traded by crypto enthusiasts. Following Dogecoin’s success, several meme-themed coins have emerged, some of which have amassed sizable market capitalizations.
One of the most popular meme coins available, Dogecoin was first established as a joke to parody Bitcoin and other well-known cryptocurrencies. Software programmers Billy Markus and Jackson Palmer, who created it, didn’t intend for it to be used in any practical way. And most meme coins fit that description. Meme currencies, unlike utility tokens, are typically not used to join a DAO, stake, or make purchases within a particular ecosystem. They are available for trade.
Popular Crypto-Meme Coins
Dogecoin
The original meme coin, Dogecoin DOGE, helped start the rally of ’21 after its price soared by more than 20,000% from a low of $0.0036 on January 1 to an all-time high of $0.74 on May 2, 2021.
Since then, the price has been rising along with the overall cryptocurrency market and is now trading at $0.0856.
Despite the lack of significant advances, DOGE remains the meme coin with the group’s highest profile. It continues to be one of Elon Musk’s favorite Twitter topics. Its price recently increased significantly due to Musk’s recent bids to acquire Twitter and take it private.
A slight increase in the price of DOGE followed Musk’s action. It sparked rumors that DOGE would be included as a tipping currency on the social media platform. If the deal ultimately closes.
A few rumors concerning prior conversations to make the network proof-of-stake are still circulating. But there has been no official announcement regarding what will happen to Dogecoin next.
The fact that one of the project’s developers will host a workshop on messaging services within person-to-person protocols. Like Dogecoin suggests, there has been some investigation into additional potential use cases for the network. By the most extended history of memes.
Shiba Inu
Shiba Inu had one of the most noticeable effects on the meme scene in 2021 after its price increased by more than 5,799,999,900% from its low in October 2020 and helped one savvy trader turn a $3,400 bet into a $1.5 billion payday. Dogecoin receives most of the ample influencer attention, but Shiba Inu also had a significant impact.
Currently trading at $0.00001156, SHIB’s price has dropped 73% from its all-time high. Its daily trading volume at $202,942,204.
Owners of SHIB saw a slight price increase on April 12 when the token was added to the well-known trading app Robinhood, but the persistent gloom in the cryptocurrency market has nearly erased any gains.
The Shiba Inu team is now concentrating its development efforts on enhancing the Metaverse functionality of SHIB by introducing a land auction event that gives members of the Shiba Inu community a chance to purchase virtual land within the ecosystem.
ElonCoin (ELON)
ElonCoin strives to honor Elon Musk. Users can gain from staking their coins and getting rewards thanks to the Proof-of-Stake consensus process. Elon Musk is the creator of SpaceX and Tesla Motors Inc.
Akita Inu (AKITA)
The Doge meme is also the inspiration for AKITA. It is primarily interested in DeFi (decentralized finance) projects. Although AKITA still has a modest market cap, it is expanding swiftly as more people become aware of its potential.
How do Meme Coins Work?
Meme coins have incredibly minimal admission requirements. The blockchain technology that underpins these cryptocurrencies is open-source. Developers can simply “fork” current cryptocurrencies by copying and pasting the blockchain, then launching them online with minor name or logo changes.
According to Tauhid Zauman, and Yale School of Management associate professor, “a meme coin is merely a cryptocurrency so that they can be quickly made with a few lines of code.” “The coin can operate on an existing blockchain or build its own.”
Zauman claims that their producers typically advertise them on social media to generate early enthusiasm and raise the price of meme coins. If the currency succeeds in building a robust community, the price may then continue to rise.
Many meme coins were developed to cash in on the mania as the bull market hysteria drove prices vertically across the market.
Are Meme Coins Safe?
Even if memes are advertised as humorous, there may be a negative aspect to the bitcoin versions.
Not only is price very erratic, many meme currencies have fallen by as much as 99%. Some have even fallen to zero in the current bear market. There have also been numerous allegations of wrongdoing and malice against the producers, who are frequently nameless.
When founders “create new coins, control 100% of the supply right out of the gate. Then focus completely on creating a buzz so they can dump their inventory.” Zeppettini cites several instances.
“Buyers of these tokens can be unaware retail participants. They may not fully understand the underlying dynamics of the token in question but merely sees paid celebrity endorsements on social media. They can as well be bot-driven activity that makes the asset appear to be “trending,” he claims.
There are other issues as well. A few persons with significant concentrations frequently have many meme coins. Seven cryptocurrency wallets have 48% of DOGE, according to statistics from IntotheBlock. The figure is even more startling for SHIB, where 69% of ownership is concentrated around 15 wallets.
A prominent investor might use their position to manipulate the market with such a high concentration, or they could sell their shares and cause a sharp decline in the coin’s price.
Making money with meme coins is theoretically conceivable, but it’s not guaranteed. The value of a meme coin can drop dramatically overnight since these cryptocurrencies are more vulnerable to volatile variables than popular cryptocurrencies like Bitcoin and Ethereum.
Factors That Affect a Meme Coin’s Value
Some things, like any other asset, can affect how much a meme coin is worth.
Market Speculation and Fear of Missing Out (FOMO)
Regarding meme coins, market speculators and FOMO frequently significantly impact their value. Investors often rely substantially on market speculation because fundamentals or tangible assets not used to support meme currencies. As a result of more people investing in certain currencies as they swiftly gain notoriety, values for those coins may soar.
Community Support
The vigor and zeal of a community play a significant role in the success of a meme coin. Actively spreading knowledge of a particular asset by individuals or organizations might result in higher demand and costs.
Usefulness
A meme coin’s level of utility plays a significant role in deciding its value. It may appeal more to investors and increase demand if the coin has practical uses, such as for payments or in intelligent contracts.
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