Understanding the meme coin frenzy might be difficult, especially if you’re not part of the meme community, which may be unlikely. The meme culture has been around for around two decades as social media platforms like Twitter and Facebook boomed at the same time, and it was easier for people to share their interests with others. Many believe that memes are only a way of entertaining oneself, but they’ve been used numerous times as tools for self-expression and social influence.
Memes have been used in numerous contexts, from religion to economics, so there’s no wonder they expanded to cryptocurrency, a new industry that is still finding its way. Dogecoin was the first of its kind, and it was released in 2013 and used on the Ethereum blockchain. The cryptocurrency blew up around 2022 when Elon Musk started tweeting about it which propelled its value and the Ethereum price as well in a matter of hours.
Many other meme coins had the same trajectory, followed by a pitiful fall, making everyone believe they’re not only without use but also significantly risky. But how true is that?
What are meme coins, more precisely?
Meme coins are cryptocurrencies based on meme concepts that are mainly used for trading. Most of the time, they have no other utility features since they’re powered by popularity rather than a balance between supply and demand.
For that reason, their volatility spikes can be quite dramatic at times. For example, their prices
are significantly high during meme coin season, after which they return to placidness. Still, not all benefit from the same frenzy, so investors must thoroughly research them and diversify their portfolios accordingly, which means reading the news 24/7.
When Dogecoin appeared, its popularity was driven by the meme behind it, so people would buy it as a joke, but when Musk brought it to light, it became a threat to all other cryptocurrencies, even to Bitcoin. Two weeks after its release, Dogecoin’s transactions surpassed Bitcoin’s daily average, which was a huge deal.
What’s the meme coin season?
Similar to the Bitcoin or altcoin season, the meme coin season is a timeframe in which meme coins experience a massive trading volume and price volatility due to receiving more attention than ever. Whether triggered by social media hype or speculative trading, meme coins have rapid price fluctuations during this time that attract an increasing number of investors and traders.
Of course, considering the lack of reassurance on the meme coins, it’s best to always conduct enough research for your next investment because the high volatility levels are dangerous. Always check a coin’s trading volume, its market cap and circulating supply to decide if it’s worth the hype and investment.
What are some great meme coins?
Besides Dogecoin, which was the first meme coin created as a joke, there are around more than 300 meme coins out there, a significant part of the 20,000 digital coins. Still, many consider that most of those cryptocurrencies are inactive or discontinued, most according to Statista, there are around 9,000 cryptocurrencies worldwide at the moment.
There are a few meme coins that deserve investment and interest, such as the Pepe coin that came from the Pepe Frog meme, one of the most controversial memes. There’s also the Floki Inu coin inspired by a similar dog meme that is found in the Bonk coin and Shiba Inu.
Currently, the leading meme coins include Dogecoin, with a $25.99 billion market cap, Pepe, with $3 billion, and Bonk, with $965 million. However, you should also be wary of emerging meme coin projects that have yet to break the internet, such as Dogwifhat, Baby Doge Coin, and Dogelon Mars.
How to diversify your portfolio with meme coins?
While creating an entire portfolio with meme coins is not the best idea, you should introduce them into your portfolio for successful diversification and high-reward opportunities. Still, it would be best to spread the meme investments across various projects to minimize the loss impact, as these coins have dramatic volatility.
You could start researching trends and timing regarding meme coins because these are the main factors that trigger value and price. For example, investors who first got their hands on Dogecoin after Elon Musk tweeted about it might have been the luckiest. This is also the case of Pepe coin, whose price skyrocketed when it became famous.
If you’ve got enough time, you could try buying low and selling high to make sustainable profits, but this implies you are able to spot price volatility and act accordingly. Setting a safe profit target can help you achieve your goals safely.
Still, meme coins can be dangerous
Meme coins might not be the best investment if you’re a beginner and don’t know how the market works. Volatility is not that easy to tackle, and even if you’re an expert in crypto, it can be possible to lose significant value from your portfolio.
At the same time, many of the meme coins on the market have no real value, so they cannot be used as a means of transaction but for trade. Indeed, some companies are starting to accept them for payments, but they’re not a reliable source to pay for subscriptions, for example. Moreover, many don’t even have a solid foundation, so they’re not secure due to their susceptibility to market manipulation.
Finally, meme coins are not free of scams, and rug pulls since they’re still cryptocurrencies. During rug pulls, developers get to raise funds to support the projects and abandon them, leaving investors with nothing valuable left. This has happened a few times with meme coins since they’re quick to attract attention online.
Do you know your memes?
Meme cryptocurrencies are part of the well-known meme culture, which is a vast source of knowledge and inspiration. However, they’re not as useful as regular cryptocurrencies, so investors only use them for trading as they’re mostly profitable during price surges. Although they can be significantly lucrative, meme coins are also risky due to their high volatility and the possibility of being the subject of rug pulls.