Ten years ago, two programmers decided to fool around and create a “fun and friendly internet currency” to prove to the community the exaggerated practical usefulness of cryptocurrencies and simply to mock the growing hype around them at the time. And they couldn’t have expected that their “doge” coin, based on a popular meme, would become the originator of an entire category of cryptocurrencies — meme coins.
According to CoinGecko, there are over 150 different meme coins actively traded in the cryptocurrency market, but the total number exceeds 400 by the most conservative estimates. Though most of them have long lost their value and are forgotten by the community, the market cap of meme coins is ~$18 billion.
Let’s break down what meme cryptocurrencies are, their value, and their investment prospects.
What Are Meme Coins?
Meme coins are cryptocurrencies inspired by memes. They’re often created as a joke, and humor is their main goal. The biggest “joke” of meme cryptocurrencies is that they’re often unsecured, and their value depends directly on their popularity.
The first meme coin was Dogecoin (DOGE), based on a popular Internet meme with a Shiba Inu dog. Dogecoin was originally created as a crypto parody of Bitcoin. Eventually, the “joke” gained enormous popularity, and the market saw a rapid increase in the number of such cryptocurrencies.
Meme coins differ from many other cryptocurrencies in that they often serve no purpose, acting simply as a means of payment and market speculation. The issuance of these coins is frequently unlimited, adding to their already high level of volatility.
However, the hype around these assets caused meme coins to gradually “evolve” and move towards a more usefulness-oriented model. For example, the Shiba Inu meme coin will soon be used to create a Metaverse. The creators of Floki Inu have gone even further and are creating a Metaverse, a trading market for the FLOKI ecosystem, and even a crypto educational platform. We’ll talk more about the usefulness of meme coins when we rank the top 3 most popular meme coins.
Why Are Meme Coins Popular?
Meme cryptocurrencies may be of interest to investors and traders for several reasons:
- Fast growth opportunities. The value of a meme coin is often extremely susceptible to information hype, so the “skyrocketing” price of a new coin can be meteoric.
- High volatility. The price of a meme coin not only has the ability to rise quickly but also fall, as well as fluctuate significantly during the day, which creates a good environment for trading.
Nevertheless, meme coins don’t lose their original priority — distracting from the severity of the crypto market and introducing a share of skepticism towards cryptocurrencies, which is why many people buy them for the sake of hype.
As for why meme coins are highly volatile and their quotes are extremely unstable, FOMO (fear of missing out) takes a leading role here. Moreover, the concept of meme coins is often used by scammers in Pump&Dump schemes.
Should One Invest in Meme Coins?
“Nobody remembers the names of Dogecoin’s peers from 2013-2014, which now don’t trade anywhere and eviscerated untold amounts of speculator money,” Jonathan Zeppettini, Head of International Operations at Decred, once said in an interview for Forbes Advisor.
His words are the main point of investing in meme cryptocurrencies. Most meme coins are created almost immediately after the release of some meme that has drawn enough attention from the community, and their primary goal here is to speculate based on FOMO. That’s why meme coins are often referred to as shit coins, most of which are created solely for scam purposes. Therefore, the prospect of investing in such coins is rather questionable.
But some meme coins eventually form a large community and a broad ecosystem, making it possible to use them as a promising investment tool. Moreover, meme coins are much more dependent than other cryptocurrencies on the public mood and culture. That’s why the hype around meme coins affects their value.
However, keep in mind that this influence isn’t always positive. For instance, Elon Musk’s tweet about not investing in Dogecoin and only buying the coin for curiosity instantly collapsed DOGE’s price. On the other hand, when Mark Zuckerberg posted a photo of pet goats with the caption “My Goats: Max and Bitcoin,” the value of the Aqua Goat meme coin (AQUAGOAT) jumped by 300%.
To summarize, meme coins can serve as a good investment if an investor is willing to pay enough attention to monitoring public sentiment and actively participate in shaping positive attitudes toward the token. But judging by the daily trading volume of meme coins, which exceeds $1.5 billion, there’s no doubt that this category of cryptocurrencies has a future.
