If you have internet access OR have friends – and we know you at least have internet access, given you’re reading this – you’ve heard of or seen memes.
You know – lolcats. Or Squinting Fry. Or Success Kid.
But you probably didn’t know this: the word “meme” actually stems from the Greek word “Ximena,” meaning “imitated.” By the definition of the guy who first used the word meme – that would be Richard Dawkins in 1976 – it is “a unit of cultural information spread by imitation.”
Well – turns out memes successfully made the jump into the world of Crypto. Their purpose is officially the same as old-school memes: just to have a bit of fun. Dogecoin, arguably the father of all meme coins, was launched all the way back in 2013 and was designed to be a “fun alternative to Bitcoin.” It flew under the radar of the general public until someone – details below – felt the need to push it heavily on Social Media.
Crypto is volatile – and meme coins are no exception. In fact, they’re probably the most volatile part of Crypto since they’re literally only created to have fun and serve no real purpose.
The best example: Useless Ethereum Token, or UET for short. From its description:
The UET ICO transparently offers investors no value, so there will be no expectation of gains.
That one is surprisingly honest about its potential. Others, not so much. But you get the point: Much fun, even more hype, but little to no actual value.
And for some reason, most of the popular meme coins revolve around some kind of dog.
Well – that’s a good question, and actually, one we’ve been asking ourselves as well. Even the internet, which tends to know everything, does not have a clear-cut answer to this question.
It’s important to point out that not all meme coins are dog-based – there are plenty of others out there. But yes, as of mid-2022, the top eight meme coins per market cap each featured a dog of some sort.
Our take: the first meme coin was dog-based, and it experienced periods of crazy growth. We can therefore assume that copycats, err, copydogs wanted to achieve similar success and stuck to a familiar theme.
Despite their rather simple purpose of “just being there for fun,” some meme coins have seen impressive growth. Both Dogecoin (DOGE) and Shiba Inu (SHIB) would have been quite lucrative investments – if bought and especially sold at the right time. But then again, that can be said about all Cryptocurrencies – heck, about all assets out there, full stop.
Meme coin growth is largely based on hype and FOMO – fear of missing out.
With Dogecoin, it was the hype created by a single eccentric investor: Elon Musk. Some people even say that Dogecoin, at this stage, is an investment in Elon’s tweets. He likes it? DOGE goes up. He bashes it? DOGE goes down. The tight correlation has given rise to countless memes (that’s right – memes of meme coins…) and actually given Elon the nickname “The Dogefather.”
As for the other “successful” meme coin, Shiba Inu, its growth was triggered by the other factor mentioned: FOMO. An investor bought a few million dollars worth of Shiba Inu out of the blue, sending the price soaring. It’s clear to see what happened: a whale jumps in, people see it, everyone thinks it must a good idea and buys in a well. (Heads up: we’ll show you all the juicy details about that Shiba Inu incident in an upcoming fueling station in our app…).
These are just the two most prominent examples – but the growth of all meme coins can be placed in either one of these categories.
Let’s start by clearly stating that we’re not offering any investment advice, one way or the other. But we can offer our opinion on the subject – here we go.
It’s true that some meme coins have seen impressive growth periods – just look at DOGE and SHIB, with market caps that still (as of Q4 of 2022) hover in the billions! But it’s also true that, by definition, meme coins aren’t meant to represent any useful project that could actually gain – or justify – a high valuation of their token. If and when meme coins have seen growth, it’s been because of hype and not because of underlying values or any kind.
Hype is unpredictable and not something any serious investor would base decisions on. Any investment in a meme coin should therefore be regarded as a high-risk gamble.
Can investors make money with meme coins? Sure.
Should anyone bet on doing so or even try to predict it? Absolutely not.
Meme coins were created to be fun – and nothing else. There usually is no underlying value, no project, or useful ambition of any kind. And while some meme coins like DOGE and SHIB have seen impressive growth (and subsequent decline…) over time, it’s almost exclusively due to hype and FOMO, making any investment into a meme coin an outright gamble.
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