Introduction
Cryptocurrencies, particularly Bitcoin, have demonstrated their strength in recent years. Investors are driven by this new blockchain ledger technology and speculate on the future possibilities based on the current market capitalization.
Bitcoin is the most popular crypto around, but many other digital tokens are also available. In recent times meme coins such as Dogecoin, Doge Dash, DeLeon Mars, Samoyed coin, and Shiba Innu have become popular, but they are volatile.
Meme coins are often created as a joke, but they can often go mainstream, as seen in the case of Dogecoin, which saw a huge thrust in value in May 2021 before stabilizing and standing 14th in ranking in 2022. Dogecoin is valued at $0.13 currently per coin.
The question is whether they should be taken seriously and what should be considered before investing in them.
What is a meme coin?
Meme coins are cryptocurrencies inspired by internet jokes and memes, and the essence of meme coin meaning. For example, the dogecoins were taken from the Doge memes created from Shiba Inu viral photo. These cryptos are not to be taken seriously though they derive momentum when community members decide to invest in them to remain in the joke. As these cryptos become famous and their value spikes, retail investors also get drawn into it, further boosting the coin’s value. Also, celebrities and other prominent online figures drive up the popularity of the meme coins. Elon Musk, Billionaire and Tesla Co-founder, are famous for having meme coin known as Floki Inu, based on his pet dog.
Origin of Meme Coins
Meme coins have been around for quite some time, but some traces of its origin go-to meme stock war in late 2020 when WallStreetBets of the Reddit community greatly inflated Gamestop stock value. Another group from the Reddit community joked about Dogecoin and saw them trending, and Internet celebrities hopped on the meme coin party and influenced more people to create similar cryptocurrencies.
Some meme coins were created to snub, such as the Mongoose coin in December 2021 after a Congress member made up the name during a digital currency hearing.
Meme Coins – common features
Meme coins generally have a high or limited supply, unlike Bitcoins which have only a finite number that can be mined. Meme coins do not have the mechanism of burning the coins or removing them from circulation. Their number keeps rising, which can cause a meme coin to have billions of units in circulation.
Because of the high numbers, the value per unit is low. For example, one can get about 6-7 Dogecoins with one dollar. Other meme coins like SafeMoon are even worth less than $0.0000005314. This low price indicates anyone can buy a large amount.
Anyone can make meme coins from software that does the heavy job. The minimum effort to churn out meme-like coins means that they can be created quickly depending on what is trending.
Final thoughts
Meme coins depend on the community’s sentiment, and artificial external influence from celebrities can lead to high volatility in their value. Whenever there is a crash in a particular meme coin, the community loses interest and moves on.
