Cryptocurrencies Meme Coins Definition and How They Work:Should You Put Your Money Into Crypto Memes?

3 min read

You wouldn’t want to invest in a cryptocurrency that has images of your favorite memes, would you?

If you use social media, you probably know how hugely influential memes can be on internet culture. Memes come and go in a matter of weeks, while others remain relevant for years. But memes don’t stop there. These internet phenomena have given way to the creation of meme coins.

So, what are meme coins, what is their purpose, and are they legit?

What Is a Crypto Meme Coin?

There’s no denying that the cryptocurrency industry has its fair share of critics. After all, the market is highly volatile, unregulated, and rife with cybercriminals. So, the enthusiasm that some feel towards cryptocurrency, and the hoards of cash they invest in it, can become something of a joke. This is often what gives way to meme coins.

Meme coins are cryptocurrencies with names and logos based on popular internet memes. These usually poke fun at the cryptocurrency industry and its rampant growth, though this isn’t always the case. Sometimes developers decide to attach a meme to the name and marketing of their coin simply because this can boost popularity through association.

Examples of Meme Coins

Take Dogecoin, for example, the first and most well-known meme coin in the market today and is among the most popular cryptocurrencies across the board. Founded in 2013 by two crypto critics, Dogecoin began as a mockery of cryptocurrency, specifically Bitcoin, one of the only valuable cryptos circulating at the time.

When the crypto-boom inflated the value of numerous coins in 2021, Dogecoin began to gain traction.
This was hilarious, because the very people that Dogecoin’s founders were mocking began investing in the coin, and it quickly rose to the top of the market.
Of course, many people invested because they appreciated the message Dogecoin was delivering about cryptocurrency’s unreliability, but this is, once again, peak irony.

Dogecoin went from being a humorous parody coin to a really valued cryptocurrency with long-term potential in 2021.
Jackson Palmer, one of the project’s creators, stepped away from Dogecoin long before the boom, citing his strong opposition to cryptocurrencies as a reason for his departure.

Another meme coin that was inspired by Dogecoin, known as Shiba Inu, has also become successful in recent years. However, this crypto was intended to poke fun at crypto, as Dogecoin did. Shiba Inu simply plays off the “Doge” meme to gain popularity.

Because meme coins are frequently driven by the community, their value can change dramatically depending on investor sentiment.
If a meme is only popular for a few months, the meme coin’s value may drop as internet users move on to something else. Investing in meme coins comes with a significant risk.

Meme coins also often have an extremely large or infinite supply. Dogecoin’s developers did consider giving the coin a supply cap but decided to leave it open-ended, meaning there is no limit to how many Dogecoin can be mined.

Shiba Inu Coin, on the other hand, has a supply cap, however it is currently set at a quadrillion SHIB, which is enormous. However, half of the total limit has already been reached, with over 500 trillion SHIB in circulation. Because of the enormous supply, demand is often suppressed, resulting in a relatively low price for meme coins (usually under a dollar).

Why Do People Invest in Meme Coins?

As previously said, some people buy meme coins because they like the message they bring out and want to support it. Others, on the other hand, see meme coins as a legitimately promising investment with little interest in the asset’s meme component. The latter rationale has grown in popularity as meme currencies have gained traction, with investors looking to get in on the fun.

However, as previously noted, meme coins may be extremely volatile, so always do your research on the price history of a meme coin before investing, and never spend more than you can afford to lose—especially if you’re effectively betting on a meme.

Meme Coins: Silly on Paper, Massive Market Caps in Reality

Though meme coins seem a little silly on paper, some have become hugely popular assets with massive market caps and trading volumes. Their value may not reach the heights of Bitcoin or Ethereum, but their presence in the industry alone shows how a seemingly jovial asset can become a serious investment option with enough hype.


 

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