Meta Description: Meme coins are a type of cryptocurrency that evolved from internet memes, popular culture references, or just plain funny ideas
Meme coins are a type of cryptocurrency that evolved from internet memes, popular culture references, or just plain funny ideas. Unlike typical cryptocurrencies, very often meme coins have no purpose at all but to represent a community or cultural phenomenon.
Nonetheless, the momentum in using meme coins has gradually picked up over the years. The new meme coin developers have increased with the popularity of the existing ones.
How Did Meme Coins Originate?
The very first meme currency appeared in December 2013 and is currently known as the popular Dogecoin.
Dogecoin was invented by two software programmers, Billy Markus, and Jackson Palmer, as peer-to-peer digital currency for an expanded audience compared to Bitcoin. The newly generated token was modeled after the then-popular Doge meme, which pictures a Shiba Inu dog with Comic Sans lettering reflecting the internal dialogue of the dog.
It was a carefree approach to the creation of a new cryptocurrency, in huge contrast to how other digital coins, like Bitcoin and Ethereum, were created sometimes seriously and technically.
The process of creating meme coins is similar to other cryptocurrencies.
The developers select a blockchain platform, sometimes through "forking," which means making a copy and changing the code of some existing coin. After that, the developers add a meme or any other theme that will be used for identification purposes for the new coin.
The success of Dogecoin spawned thousands more meme coins, each trying to achieve the same sort of meme-to-movement popularity by mixing comedy, community engagement, and the speculative nature of cryptocurrency investment.
The popularity of meme coins also relies heavily on social media and community engagement.
Platforms like X, Reddit, and Telegram are used to create promotional awareness and generate interest in meme coins.
Shiba Inu (SHIB)
Shiba Inu, or SHIB, is an ERC-20 altcoin similar to Dogecoin that runs on the Ethereum blockchain.
Another meme coin, it was created in August 2020 by an unknown group of people under the name Ryoshi.
The Shiba Inu currency was originally intended to be a community-driven and created cryptocurrency, garnering the moniker "Dogecoin killer" over time.
ShibaSwap, a decentralized exchange, allows users to trade SHIB and other tokens, stake coins for incentives, and participate in liquidity pools.
SHIB on the rise
Shiba Inu's price has risen almost as much as any other cryptocurrency in market history. Specifically, in 2021, it returned 43,800,000%. To put it another way, $5 invested in SHIB would have rapidly increased to $2,190,005. Again, given the volatility of cryptocurrencies in general, and meme coins in particular, such swings are incredibly impossible to forecast.
Pepe (PEPE)
The other meme coin that was introduced on the Ethereum network is Pepe (PEPE). This skin was made in the style of the online meme Pepe the Frog, which became a mainstream phenomenon during the early 2000s.
This cryptocurrency project has the ambition to position itself among the most recognizable meme coins, such as DOGE and SHIBA. It is proper to say that it realized its mission given this coin has been existing since Q2 2023 and is often in the top 50 cryptocurrencies in terms of trading.
In the blink of an eye, the PEPE coin burst to a market capitalization of a whopping 1.6 billion dollars, tending to flood meme coins. The rise of PEPE has turned all early investors into millionaires.
Why Do People Invest In Meme Coins?
People invest in meme coins for a variety of reasons, ranging from a desire to be a part of a community to the hope of gaining financial benefits.
Here are some important elements that draw investors to meme coins:
Being part of communities
Most meme currency cryptocurrencies are the result of community efforts. Being a part of these communities can be a fun and appealing experience.
Members of such networks share jokes, and memes, and encourage one another's investing decisions, fostering a sense of belonging and companionship.
Potential for Quick Profits
The cryptocurrency industry is known to most people for its volatility, and sometimes meme coins reflect this with their rapid price movements.
For instance, the PEPE currency made quite a killing within months of its launch in April 2023. To be specific, it was returning as much as 2000% to investors within less than a month.
This leads to the conclusion that investors get attracted to the prospects of quick, high returns by hearing stories about early meme coin owners who were able to make a killing in profits.
Viral Marketing and Social Media Influence
Memecoins often derive their popularity through social media, shoutouts of influential people, and viral marketing campaigns.
One example is Dogecoin, which reached its all-time high of $0.08 in February 2021 after its price had been hyped on Twitter by celebrities like Elon Musk, Snoop Dogg, and Gene Simmons, the frontman of KISS.
This explains the rapid price increase with new investors hopping on board in hopes of riding the popularity wave to profits.
Ease of Access and Low Cost
One major factor contributing to this attribute is the fact that most meme coins are very cheap per unit. Thus, it becomes easy for any investor to purchase millions, if not billions, of tokens, using relatively little sums of money, quite an attractive deal for those looking to get their hands on large amounts of digital assets.
FOMO (Fear of Missing Out)
One could feel the FOMO while witnessing the spectacular rise of coins like Dogecoin or Shiba Inu. It is precisely this same psychological principle that has investors buying into meme coins, hoping to catch the next big one.
They are funny, and they entertain people.
The playful and light-hearted nature of the meme coins provides a "fun factor," as reflected in their branding and community activities that is otherwise not evident in other kinds of serious investments.
So, just having done something extraordinary and the possibility of gaining a high return is enough incentive to invest a large amount of money.
Will This Trend of Meme Coins Continue?
As of now, over 1000 meme currencies are listed on CoinMarketCap. The reality is there will probably be many more in the future.
That tendency for investment in meme coins will likely go on in light of deep rooting in internet culture and great participation from the communities with huge attraction towards fast financial returns.
Noticeably, the low purchase price and social media influence are some of the elements that continue to drive interest in such types of cryptocurrency. However, changes to future regulations and market forces will chart their future. One should be extra careful in deciding to invest in meme coins because of their volatility and high risk. To expound on this, there is a call for undertaking in-depth research on any meme coin prior to investment and concerning a general investment strategy.
Frequently asked questions
What are meme coins?
Meme coins are a class of cryptocurrency based on internet memes, popular culture references, or plain funny ideas. Unlike regular cryptocurrencies, which always do explain their purpose, meme coins often do not and thus serve as a symbol rather for a community or some kind of cultural phenomenon.
What are the risks of investing in meme coins?
Meme currencies are really risky and very speculative, in view of its high volatility. The prices can swing drastically, which can result in huge losses. Besides that, often a meme coin has no intrinsic value and function available, which makes its long-term survivability questionable.
What can the investors hope to get from the meme coins?
Meme coins can give investors rather large returns, especially if they invest early before the coin becomes a meme. For example, Shiba Inu saw its price increase by 43,800,000% in 2021, which turned tiny investments into large sums of money.
