Meme coin, also known as meme coin, comes from the meme culture of the Internet.
The meme market has seen exponential growth in 2021, especially dog-themed memecoins. As of November 2021, one of the most popular "varieties" is Dogecoin (DOGE) and its competitor Shiba Inu (SHIB).
Meme is a cryptocurrency based on the meme culture. It is relatively volatile compared to major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). This may be because meme coins are heavily community-driven tokens. Their prices are often influenced by social media and the sentiment of online communities. This tends to bring a lot of volatility, but also FOMO and financial risks. While it is true that some investors have made fortunes through meme coins, many have also lost money due to market fluctuations or investing in some tokens.
What is Meme Coin?
Memecoins are cryptocurrencies inspired by meme culture or jokes on the internet and social media. The first memecoin created was Dogecoin (DOGE). DOGE was launched in 2013 as a parody inspired by the popular Doge Meme of the Japanese Shiba Inu.
Memecoins tend to be highly volatile. They are largely community-driven and can gain popularity overnight due to online community recognition and FOMO. Still, their prices can also unexpectedly slide as investors turn their attention to the next memecoin.
Another feature of meme coins is that they often have a large or unlimited supply. For example, Shiba Inu (SHIB) has a total supply of 100 trillion tokens, while DOGE has no maximum supply but has more than 100 billion tokens in circulation. Since meme tokens generally do not have a coin burn mechanism, the huge supply makes them relatively cheap. For just $1, you can buy millions of meme tokens.
Why are Memecoins so popular?
While it’s hard to pinpoint specific reasons, some say the cryptocurrency market has grown during the COVID-19 pandemic as retail investors seek to hedge against inflation. Memecoins have also thrived on the hype, growing in both market cap and number of coins.
It all started with the "meme stock" saga of GameStop (GME) and AMC Entertainment (AMC) in late 2020, with the Reddit community pushing the prices of these stocks up by as much as 100 times in a few months. In January 2021, a Reddit group joked about pushing up the price of DOGE to create a cryptocurrency equivalent to GME. The trend caught people's attention, and the DOGE price rebounded along with the influence of Tesla CEO Elon Musk's tweets. Dogecoin reached a new all-time high of $0.73, an increase of more than 2,000% in five days.
However, in May 2021, Elon Musk publicly joked about DOGECOIN on TV, and many people said this was the reason for the subsequent price drop. Some investors then turned to other memecoins on the market, such as the "Dogecoin killer" SHIB. At the same time, retail investors also FOMOed into memecoins, hoping to become millionaires overnight, triggering another memecoin rally.
Another reason retail investors find memecoins attractive is that they often cost just a few cents or even pennies. Technically, the low price doesn’t mean much because the supply of these coins is so large. Still, holding millions of a certain memecoin feels different than holding a small portion of ETH or BTC. Traders can get thousands or even millions of DOGE, SHIB tokens for just a few dollars.
Besides the potential profits, the craze for memecoins is also driven by the sentiment of their respective communities. As mentioned earlier, memecoins are inspired by popular internet meme culture, are meant to provide fun, and are sometimes considered an "inside joke" of a community. Buying memecoins, in a way, is a support for their respective communities. After the GME stock market saga, inspired by the Reddit group SatoshiStreetBets, memecoin traders started a battle to bet against mainstream cryptocurrencies.
Recent hot meme series
The most popular meme series in recent days:
1. Goat, Sol chain market value 300M, contract CzLSujWBLFsSjncfkh59rUFqvafWcY5tzedWJSuypump
Ethereum chain market value 2M, contract
0x239f2a8554b9b52026d84942404f2e4a17e15220
2. Daram, market value 20M, contract 0xad86b91a1d1db15a4cd34d0634bbd4ecacb5b61a
3. Frogs, market value 3M, contract 0x3e9c3dc19efe4271d1a65facfca55906045f7b08
From this perspective, Ethereum's Goat has a higher cost-performance ratio. Ethereum chain currently lacks a Goat leader, which has the opportunity to have a market value of tens of millions of US dollars. Frogs will see if Fomo can succeed. Sol chain's Goat and Ethereum chain's Big Goose have higher market values.
Risks and precautions:
Investing in meme coins is usually associated with a higher risk, so it is important to diversify your portfolio and not put all your funds into a single asset.
Only invest amounts you are willing to lose and be prepared to hold on for the long term.
Remember, the market is risky and investment should be cautious. In this Memecoin feast, I hope every participant can reap a lot!
