Along with DeFi, NFTs, and passive income generation protocols, one more type of crypto asset has been making waves in the crypto space recently. Meme coins have demonstrated that, even without inherent value, they can still impact the world of finance. When in less than one year the price of a meme coin increases by 2,000,000%, as was the case with the , users may start thinking that meme tokens are a profitable investment option. Shiba Inu coin However, the market is more complex than that. Let’s have a closer look at successful meme coins, the factors that influence their prices, and whether investing in them can be profitable in the long term. What Are Meme Coins? Cryptocurrencies appeared as an attempt to circumvent the dominance of centralized structures in the world of finance. The first cryptocurrency was Bitcoin and it paved the way for the development of thousands of digitized assets. Their goals ranged from attempting to create an alternative to fiat money to facilitating cross-border transactions to laying the foundation for development. Web 3.0 The main difference between meme coins and other blockchain-based assets is their humorous nature. They evolved from pop culture and are inspired by memes, jokes, and ideas captured in images or videos on the web or social media. These coins are designed to be shared and become viral. Meme coins are designed to be traded only and they do not have any inherent utility. An unlimited or large supply is another distinctive feature of meme coins. DOGE has an unlimited supply while Shiba Inu’s supply is limited to 1 quadrillion tokens. Meme coins do not have a coin-burning mechanism. Therefore, many coins are in circulation and their prices are usually low. Such coins are community-driven. It explains their high volatility. Meme coin can gain popularity over just hours due to community endorsement and FOMO, and lose value as rapidly as it was gained when the community’s attention is directed elsewhere. Influencers and famous people can boost or drop a meme coin price by posting about it. When Elon Musk shared a picture inspired by the Lion King cartoon, the DOGE coin’s price started to grow. When the famous entrepreneur continued tweeting about DOGE, the value of the coin surged. But after Musk joked about DOGE in “Saturday Night Live”, the coin price dropped immediately. This is the clearest example of how a meme coin's price depends on the influencers supporting it. The Most Popular Meme Tokens Based on market capitalization, the most successful meme tokens are DogeCoin, Shiba Inu, and Dogelon Mars. Dogecoin (DOGE) was created in 2013 by as a joke at the growing hype over cryptocurrency. The coin logo capitalizes on the Shiba Inu image from the popular meme. Dogecoin Adobe developer Jackson Palmer The coin is based on the Litecoin blockchain and utilizes the Proof-of-Work consensus algorithm to verify transactions. The coin users managed to capitalize on the crypto bubble in 2017 but after the market collapse in 2018, DOGE lost most of its value. Only in 2020 when Musk started expressing his support to the DOGE community did the value of DOGE surge. Though its value has dropped from its all-time high of USD 0.7376 to USD 0.08, the coin takes first place among all meme coins based on market capitalization. DOGE is traded on all major exchanges and accepted in many online stores as a payment method. This token is also used for tipping content creators. There is no doubt that for now, it is the most successful meme coin and despite the common belief that it wouldn’t last long, DOGE remains. I don’t believe that DOGE is reliable in terms of long-term investment unless Musk or other public figures make it more relevant. For example, Musk could make it an official cryptocurrency of Tesla. Still, traders can benefit greatly in a short time. Shiba Inu (SHIB) (SHIB) was launched in 2021 by an anonymous developer. It has positioned itself as a DOGE killer and used the same Shiba Inu dog image as DOGE. Even though SHIB hasn’t received such massive support from Musk as DOGE did, the coin still managed to make some early investors rich. Shiba Inu Within a couple of months, the coin value surged from $0.000,000,01 to $0.00008. To put this into perspective, if a user bought $1 of SHIB, they could sell it for $8,000 when the coin reached its all-time high. At the time of writing, SHIB was trading far below its all-time high at $0.00001176 but has nonetheless taken its place in the crypto ecosystem. The main difference between Shiba Inu from other meme coins is that it has some utility in that it offers a DeFi and an NFT platform. This is one of the main reasons why, in my opinion, this coin might be a DOGE killer in the long term. Also, this is one of the main reasons why it may stay even if other meme coins fail. Dogelon Mars (ELON) is another doge-themed coin. It operates on the Ethereum and Polygon blockchains. The coin takes third place among meme coins based on market capitalization even though its price is still far from the prices of Shiba Inu and DOGE. Dogelon Mars It aims to replicate the success of DOGE while piggybacking on Musk’s plans to colonize Mars. Even though the coin has an impressive community, the project has no utility and no clear roadmap. Are Meme Coins Safe to Invest in? DOGE and SHIB have made waves in the cryptocurrency space by making their early investors rich. These coins are very cheap, meaning a user can buy millions of them without spending much money. With even the smallest price increase, profits can be very high. One should consider that meme coins (except SHIB) have no utility and depend only on the market sentiment. Investing in meme coins is probably among the riskiest investment types you can choose. Yet it can still be extremely rewarding if you select the right project.

Ethereum

Dogecoin

Shiba Inu

Polygon

Litecoin

Waves

Adobe

Fomo

Tesla

LUNA Debacle: A Planned Attack or an Imperfection in the System?

Web 3.0's Role for Digital Society, and Reasons to Invest in Web 3.0 Infrastructure

Follow me on Twitter! 

Nominated for 2022 - HackerNoon Contributor of the Year - Jobs

Nominated for 2022 - HackerNoon Contributor of the Year - Digital Transformation

Nominated for 2022 - HackerNoon Contributor of the Year - Cryptocurrency

Co-founder & CEO

Too Long; Didn't Read

Meme Tokens Lifetime and Their Place in the Cryptomarket

Meme Tokens Lifetime and Their Place in the Cryptomarket

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

2023: What's Driving The Breakout Year for Generative AI?

$1B Capitalization: Meme Token Launch Strategy Under the Microscope

(1/100) Crypto Countdown: Golem

06/09/2018: Biggest Stories in the Cryptosphere

07/09/2018: Biggest Stories in the Cryptosphere

$PEPE, a Purple Lamborghini, and More: The Story Continues

2023: What's Driving The Breakout Year for Generative AI?

$1B Capitalization: Meme Token Launch Strategy Under the Microscope

(1/100) Crypto Countdown: Golem

06/09/2018: Biggest Stories in the Cryptosphere

07/09/2018: Biggest Stories in the Cryptosphere

$PEPE, a Purple Lamborghini, and More: The Story Continues

Light-Mode

Classic

Newspaper

Minty

Dark-Mode

Neon Noir

Minty

HN StartUps