One of the meme definitions provided by the Oxford Dictionary says that it’s “an image, a video, a piece of text, etc. that is passed very quickly from one internet user to another, often with slight changes that make it humorous”. It’s difficult to imagine modern society without funny memes, the introduction of meme cryptocurrencies was just a matter of time after the wide audience explored the market of digital currencies.
Are meme coins good investments right now? Some experts hesitate about this because many meme crypto projects currently introduced to the market are believed to be scams. Are there any positive stories about investing in meme coins? Let’s find this out.
The initial purpose of meme coins founders was to mock mainstream cryptocurrencies. Despite the fact that this purpose seems quite non-serious, many meme coins appeared to be quite solid projects, which helped them to gain value and acquire loyal communities quite quickly.
Meme coins might have some interesting utility features but these are rather rare occasions because the majority of minor projects aren’t unique and don’t have strong fundamentals to stay afloat for a long time. Nonetheless, people buy them. Many cryptocurrency experts suggest that this is rather a popular trend than a reasonable investment since all meme coins are highly-speculative instruments.
From a technical point of view, meme cryptocurrencies don’t differ from Bitcoin or Ethereum. They might work on the same protocol and run within the same blockchain ecosystems. The only significant difference is that meme coins represent funny ideas that went viral on social networks.
The roots of the concept
The history of the first meme coin dates back to 2013. It was Dogecoin, the project released by Billy Markus and Jackson Palmer, that introduced this concept to the cryptocurrency market. As you can guess, DOGE is named after a viral meme about the Shiba Inu dog.
Initially, Billy Markus and Jackson Palmer didn’t follow any prominent aim, they just wanted to mock the hype around Bitcoin, which has one of the most successful bullish runs in its history during that period. The founders just chose the most viral meme, which deliberately misspelled the word “dog” and devoted an entire cryptocurrency to this funny Japanese dog.
As with any meme on the Internet, Dogecoin quickly acquired its loyal community that was very eager to share information about its favorite funny thing. However, Dogecoin is something bigger than just a laughable picture. That’s why its active users made a great contribution to its growth.
One cool example of how the active position of the cryptocurrency community can boost its popularity is that DOGE users crowdfunded around $30,000 to help the bobsleigh team from Jamaica to go to the 2014 Winter Olympics. This story became widely discussed in the media all over the globe, attracting more and more attention to the project and increasing its value.
Elon Musk is the most famous member of the DOGE community. The Tesla CEO expressed his support for the project numerous times, which boosted the hype around this meme coin and made it interesting for big investors. Musk made a great contribution to the promotion of Dogecoin, even though its value quickly dropped when Elon became a less active supporter. Nonetheless, today, Dogecoin is the 10th biggest cryptocurrency with a market cap of over $8 billion. Does it make Dogecoin a good investment? Find out more from this source.
Other popular meme coins
Although the majority of investors realize the big disadvantages and highly-speculative natures of meme coins, this doesn’t stop developers from creating them. According to Forbes, more than 200 meme cryptocurrencies have been created since the launch of Dogecoin in 2013.
The majority didn’t manage to get to the popularity of the pioneer in this niche. But there is one successful case of the Shiba Inu coin. SHIB is even called the “Dogecoin killer”. It represents the same meme and its ambitious goal to outperform DOGE in its field was probably one of the reasons for its growing popularity in 2021. As of the date of writing this review, the total market capitalization of Shiba Inu is over $5.5 billion, making it the 15th biggest cryptocurrency.
There are many other meme coins but they cannot get even close to these giants of the niche in terms of popularity and market capitalization. This is especially obvious after the market crash, during which both DOGE and SHIB lost more than 60% in value. Other meme coins aren’t even traded on major cryptocurrency exchanges.
How do meme coins work?
Blockchains are open-source, meaning there are no difficulties for those who want to launch similar projects. All they need to do is to “fork” the cryptocurrencies they want and simply use the underlying blockchain to launch an ordinary cryptocurrency with a viral logo and funny concept. This is how many meme coins are actually created.
Experts suggest that the vast majority of meme coins founders don’t try to introduce something new and unique in terms of blockchain technologies. They just copy open-source codes of existing blockchains and use memes to attract more users and investors. It turned out that memes are quite efficient when it comes to promotion. The creators of meme coins understand this so they promote their projects on social media trying to increase their values within the shortest terms. This works when the entire cryptocurrency market is on its bullish rally but then, many meme coins fail and lose almost all their value. Dogecoin and Shiba Inu are rather exceptions because the third-biggest meme cryptocurrency, Dogelon Mars (ELON), is in the 163rd position by market capitalization.
Conclusion: is investing in meme coins a worthy idea?
We suggest that you shouldn’t consider investing in specific categories of coins. This is especially relevant for highly-speculative meme coins, the majority of which don’t have limitations in terms of coin supply. Investing in meme coins is extremely risky, so consider each project independently before making a final decision.