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Are meme coins valuable, and do they have any real value?
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 CoinGabbar, 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 text provides an overview of Dogecoin, a popular meme coin that was created in 2013 based on a meme featuring a Japanese Shiba Inu dog. The coin gained publicity when Elon Musk discussed it in his tweets. Despite its humorous origins, Dogecoin was created by programmers Jackson Palmer and Billy Marcus as a satirical take on the rise of alternative cryptocurrencies. The coin’s popularity was further boosted 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 currently holds the 8th spot among popular cryptocurrencies on the Coinbase platform and ranks 9th with a market cap of $10 billion. However, meme coins like Dogecoin lack a stable fundamental basis and are often driven by popular memes and the influence of well-known individuals. Although Dogecoin reached a peak of over 76 cents in May 2021, its price has significantly dropped since then to just over seven cents. In 2023, the value of Dogecoin has only fluctuated by 3%, representing a negligible change for such a volatile asset.
Shiba Inu (SHIB)
This is about another popular meme coin, which holds 0.18% of the 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.
The 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
In 2021, a meme coin called PEPE was launched. The creators drew inspiration from the well-known Internet meme “Pepe the Frog.” PEPE coin operates on the Binance Smart Chain, enabling quick and accessible transactions. According to Coinbase, PEPE coin is ranked 72nd in the market with a market capitalization of nearly $600 million.
PEPE meme coin operates as a deflationary token, meaning that the total supply of the coin will gradually decrease over time. Each transaction incurs a 2% fee, a portion of which is burned, thereby reducing the overall currency supply.
The popularity of the meme propelled the PEPE meme coin to quickly achieve a market capitalization of $1 billion. However, within a few days, its value plummeted by 40% and dropped to $600 million.
So is it worth investing in meme coins?
Let’s discuss what meme coins are and why they were created. Are meme coins simply meant to benefit their creators, or is their popularity overhyped with the intention of taking advantage of unsuspecting investors?
Many critics argue that meme coins lack a strong foundation and long-term value. Despite this, there are advantages to such projects. Firstly, the rapid price fluctuations can be advantageous for experienced short-term traders who engage in daily trading. These humorous memes have the potential to quickly gain popularity, making it difficult to predict their success. Those who can adeptly buy and sell may stand to make significant profits.
Secondly, meme coins attract newcomers to the world of cryptocurrencies and introduce them to blockchain technology. They could serve as a gateway to broader opportunities in Web3, the future of the internet, such as gaming on the GameFi platform or immersing in the metaverse.
However, it’s important to recognize the high risk of potential failure associated with such projects. A negative experience with meme coins could have a detrimental effect on the reputation of cryptocurrencies and attitudes towards investing in this area.
It’s crucial to remember that before investing in any cryptocurrencies, including meme coins, thorough research is essential, and one should be prepared for the possibility of losing their funds. Investing in cryptocurrencies is a high-risk endeavor, and everyone should make decisions based on their individual circumstances and financial capabilities.
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