Meme coins – what is their value, and does it exist at all?
The story of these coins started out as a joke, but gradually turned into one of the most popular offerings in the crypto world. According to Coinmarketcap, the most popular meme coin, Dogecoin, is now in the TOP 10 by market capitalization. If someone had invested $1,000 in Dogecoin in March 2019 and sold it in May 2021, they would have earned $344,000. But everything is not so simple; in addition to profits, memcoins also brought huge losses.
Let’s figure out why next.
What is meme coins
Memecoins are a type of digital currency based on popular internet memes. And memes are a funny or interesting element of some information, for example, statements, pictures, videos or audio that spread across the Internet and social networks. That is, memecoins are digital currency inspired by specific Internet jokes or memes.
What are the most popular meme coins?
In this article, we’ll look at three of the most famous meme coins—Dogecoin, Shiba Inu, and Pepe—and see how they’ve evolved over time.
Dogecoin(DOGE)
This is the most famous and popular meme coin. It was created in 2013 based on a meme of a purebred Japanese Shiba Inu dog with comic text in the form of messages “funny Shiba”. He became famous thanks to Elon Musk, who actively discussed him in his tweets. Despite its comic nature, Dogecoin was created by programmers Jackson Palmer and Billy Marcus not so much for fun, but to satirize the rise of other alternative cryptocurrencies.
His popularity has also been bolstered by social initiatives such as raising funds for the Jamaican bobsled team at the 2014 Winter Olympics and Doge4Water to provide clean drinking water in Kenya. Dogecoin is currently the 8th most popular cryptocurrency on the Coinbase platform and ranks 9th in the $10 billion market cap.
Meme coins, and the Dogecoin coin is no exception, do not have a stable fundamental basis. They are associated with popular memes, and their demand often depends on the statements of famous people. The coin peaked at over 76 cents in May 2021, but its price has continued to fall since then and is now just over seven cents. In 2023, Dogecoin’s value has only changed by 3%, which is a negligible change for such a volatile asset.
Shiba Inu (SHIB)
This is another popular meme coin, it holds 0.18% market share with a capitalization of over $4.5 billion. SHIB was created as a response to Dogecoin and is considered its “killer”. Both meme coins have a common image – a Shiba Inu dog originating from Japan.
The person behind the creation of SHIB was a man named Ryoshi, who sought to ensure fair distribution and ownership of the coin. SHIB is not just a token, it is an entire ecosystem with the decentralized exchange ShibaSwap and a whitepaper known as the “woofpaper” that explains the goals of the project.
Demand for Shiba Inu, like Dogecoin, has also declined. Its maximum was reached in October 2021 at $0.00008251. Since then, the price of the coin has dropped by almost 90%. In January 2023, investors may have noticed a positive price movement, but then the price fell again and approached late 2022 levels.
PEPE
This meme coin was created in 2021. The creators of the coin were inspired by the popular Internet meme “Pepe the Frog”. PEPE coin operates on the Binance smart chain and this ensures fast and accessible transactions. According to Coinbase, PEPE coin ranks 72nd in the market with a capitalization of almost $600 million.
PEPE meme coins works on the principle of a deflationary token, that is, the total supply of the coin will gradually decrease. There is a 2% fee on every transaction, part of which is burned, reducing the total amount of currency available.
The fame and popularity of the meme helped the PEPE meme coin quickly reach a market capitalization level of $1 billion, but then, within just a few days, its value fell by 40% and dropped to $600 million.
So is it worth investing in meme coins?
Let’s summarize what meme coins are and why they were invented. Maybe their goal is to enrich their founders? Perhaps their popularity is exaggerated and they were created with the aim of deceiving naive investors?
Most critics of meme coins agree that these coins do not have a strong foundation and long-term value. But despite this, such projects also have their advantages. First, rapid fluctuations in price can be beneficial for experienced short-term traders who close trades throughout the day. These funny memes can become a huge hit overnight, their success is impossible to predict, and those who can skillfully buy and sell will make significant profits.
Secondly, meme coins attract new people to the world of cryptocurrencies and introduce them to blockchain technology. They could become a springboard to the broader possibilities of Web3, the Internet of the future, including games on the GameFi platform or immersion in the metaverse.
However, it is worth understanding that there is a high risk of possible failure of such projects. No matter how it may happen, a negative experience with meme coins can negatively impact the reputation of cryptocurrency and the attitude towards investments in this area.
It is important to remember that before investing your money in any cryptocurrencies, including meme coins, you need to do thorough research and be prepared to lose your funds. Investing in cryptocurrencies is a high-risk process and everyone must make their decisions based on their personal circumstances and financial capabilities.
