Meme coins or hype coins are a fascinating group of digital assets that happens to be the latest craze in the crypto world. While other altcoins prioritize solutions to financial issues, meme coins aim to capture the lighter side of blockchain. Since Dogecoin, the first hype coin, was released in 2013, many others have made their way into the market. In this article, we’ll be exploring what this crypto asset is and why it matters. Additionally, you’ll understand whether you should consider investing in them or not. Let’s get right into it!
KEY TAKEAWAYS:
- Meme coins or hype coins are cryptocurrencies that get their value from viral trends and community engagements.
- The first hype coin, Dogecoin, was released in 2013, and it paved the way for many others into the market.
- Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) are some of the most popular meme coins.
- If you want to invest in this group of assets, keep in mind that they are volatile and have no inherent value.
Understanding Memecoins
Hype coins get their value from internet memes, community engagements, and viral trends rather than technical innovation. As you probably know, Bitcoin and Ethereum provide decentralized solutions to real-life problems. Meme coins, on the other hand, are either created as a joke or to ride on the reigning internet culture.
Dogecoin was introduced as a parody of Bitcoin. At first, it was used to tip content creators online. However, its funny and light-hearted approach earned it a massive community that remained active even after the joke faded. Thus, it became a pace-setter for other memecoins like Shiba Inu, Floki, and Baby Doge.
Hype coins thrive on social media, influencers, and the internet community at large. As a result, their process can skyrocket based on situations like a viral tweet or celebrity endorsements. Crypto enthusiasts have found these assets attractive and are always eager to jump on the next meme coin trend.
Pros of Meme Coins
Despite their humorous origin, hype coins offer some advantages to traders, investors, and their individual communities. They include:
- Sense of community: Hype coins thrive on community participation. As such, they have numerous online forums, social media threads, and campaigns. For example, Dogecoin has an active “DogeArmy” that has kept its market going for a long time. This sense of belonging has drawn many users to meme coins.
- Potential for high returns: Even though they start as low-value assets, meme coins can grow to give explosive gains. For example, Dogecoin investors made huge profits when public figures like Elon Musk endorsed it.
- Low entry barriers: Memecoins are more accessible to a larger audience because they are inexpensive to buy. With a few dollars, you can buy millions of these tokens. This fact is appealing to new investors, and it gives them a sense of involvement in the crypto world.
- Viral potential: Hype coins tap into the viral nature of the internet to gain visibility. While this possibility is highly unpredictable, many enthusiasts find it exciting.
Cons of Meme Coins
As much as these assets have their benefits, it has some drawbacks you should take note of. Check them out below:
- Extreme volatility: With the potential to earn big comes the risk of losing a major part of your investment in a short time. This is because their prices can rise today because of a viral tweet and dip suddenly once the hype fades.
- Lack of real-world utility: Memecoins have no value aside from being speculative assets. As such, it is unlike projects like Ethereum and Solana that support smart contracts and decentralized applications (dApps). In the long run, their lack of functionality makes it difficult for them to have sustained value.
- High risk of scams: There are many fraudulent projects in the namecoin space. Scammers can create a new token and wait till the hype around it leads to a price spike. Then, they disappear with investors’ funds, a practice called rug pull.
- Short lifespan: Hype coins disappear as fast as they rise once the excitement fades. Without a defined development goal, they are at the mercy of internet trends.
Ten Most Popular Meme Coins
Meme coins are created from different scenarios, and they come in all forms. However, as of September 13, these top five seem to be capturing the most attention.
- Dogecoin (DOGE): It was the first to be launched and retains its title as the “King of meme coins.”
Price: $0.101
Market cap: $14.72 B
- Shiba Inu (SHIB): Also referred to as the “Dogecoin killer,” it is a dog-themed hype coin.
Price: $0.0000133
Market cap: $7.81 B
- Pepe (PEPE): This coin’s humorous branding and dedicated supporters have made it go viral among meme coin enthusiasts.
Price: $0.00000726
Market cap: $3.05 B
- Dogwifhat (WIF): Dogwifhat follows the trend of canine-themed coins and has gained a loyal community.
Price: $1.52
Market cap: $1.52 B
- Floki (FLOKI): Floki is positioning itself to be more than a meme coin by incorporating some aspects of decentralized finance (DeFi) and NFTs.
Price: $0.000122
Market cap: $1.18 B
Finally, Are Meme Coins a Good Investment?
It depends. People invest in small amounts of hype coins in hopes that their prices will rise. Thus, it comes with enormous risks and can even be likened to gambling. However, if you want to invest in them, take note of the following to get the best out of the market:
- Only invest what you can afford to lose.
- Thoroughly research any toke you decide to put your money in.
- Avoid new tokens that promise extraordinary returns.
- Prepare your mind for the potential of significant losses.
Undoubtedly, memecoins have carved a niche for themselves in the crypto world. They have blended internet trends and finance in ways humans never thought possible. But their extreme volatility is a reason to always exercise caution if you choose to invest in them.
