Cryptocurrency is so developed that now we can divide it into categories. There are multiple categories based on the origin of the coins like Bitcoin, Altcoins, Stablecoins and so many more. One of these categories is meme coins. This is a subcategory of crypto coins originated by internet trends or as jokes, often inspired by internet humor, memes or other online communities. They have a playful background but still some meme coins have managed to gain immense popularity to get actual financial backings. Thus, they have proved to be attracting both crypto enthusiast and casual investors. Some of the most popular meme coins are Dogecoin (DOGE) and Shibu Inu (SHIB) provided by different top rated crypto signals provider.
Origin
These coins often begin as a minor response to other cryptocurrencies like Ethereum or Bitcoin. They are often associated to a meme or other cultural references. When the meme coins initially started, they were not considered as a solid utility and were created without a long-term plan. The first meme coin was dogecoin, it was created in 2013 as a joke on Bitcoin. It was based on a popular doge which featured a “Shibu Inu dog”. Although it all started as a joke but dogecoin quickly became popular due to its funny image and people started using it for charity and tipping purposes in multiple online communities.
Another famous meme coin is Shibu Inu, it was launched in 2020 and it was branded as “Dogecoin killer”. This coin rapidly became popular and was able to attract a dedicated community. The reason behind its popularity was its low-price, easy accessibility and the meme driven marketing behind it.
What Make Meme Coins So Popular?
There are multiple factors that contributed into the popularity of a meme coins. These factors not only promote these coins but also make them different from other traditional cryptocurrencies.
- Meme coins are dependent on the enthusiasm and energy of different online communities. Platforms like Twitter, TikTok and Reddit play a very important role in it as different social media influencers even celebrities and other popular public figures have contributed to make these coins successful.
- Crypto market thrives on public interest which makes these coins so popular and increase their prices. For example, in 2021 Elon Musk frequently tweeted about dogecoin, due to his tweets a lot of people took interest in this coin resulting in the price spikes. He referenced dogecoin as “the people’s crypto” which in turn contributed in its mainstream popularity.
- Meme coins are easily accessible and usually cheaper in price when compared to other cryptocurrencies like Bitcoin. It is very useful for new investors as with small investment you can buy a large amount of meme coins. When you own a big part of something the possibility of making huge gains is always present. For a younger or a new investor, it is very appealing when you can make a huge profit with minimal investment.
- Meme coins can also trigger a fear of missing out in investors. When a meme coin become trending on a social media platform, a lot of people try to hop on the bandwagon in FOMO. Due to this reason a lot of these coins had short-lived but explosive price increases giving investors a huge profit.
- Cryptocurrency market is a very stressful market and meme coins provide a sense of fun and community which are absent in other cryptocurrencies. As their origins are jokes, they feel less intimidating which allow more approachable entry points in the world of cryptocurrencies. A lot of younger people can resonate with the spirit and humor behind these coins as they appreciate the internet memes a lot.
Risks Of Meme Coins
Meme coins are a source of fun and can offer potential gains but they also have some considerable risks.
Lack of utility
Cryptocurrencies like Bitcoin or Ethereum have clear use cases and technologies behind them. These cryptocurrencies serve to be a store of value or as a platform for other decentralized apps. On the other hand, meme coins do not have much to offer in the name of functionality. That is why they are more vulnerable to lose relevance when the hype dies down.
Volatility
As a meme coin can be hyped by a single tweet or a social media post, it can also cause the prices to crash in minutes. That is why they are highly speculative and very prone to large price fluctuations. Most of the times their value is driven by hype rather than utility making them unpredictable.
Rug pulls
These coins are very easy to create which make them and easy way for fraudsters to take advantage from. Meme coin space is filled with scams where bad actors take advantage of the social media hype and launch a coin and after collecting funds from investors, they abandon the project. This phenomenon is called a rug pull, which is a very common scam in crypto world.
Conclusion
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Meme coins is a thread that binds internet culture with the blockchain technology. They have made their own category in the crypto world. Their rising fame highlights the influence of community engagement and social media in changing a financial trend. But their popularity also underscores the way entertainment along with viral marketing can influence a crypto market just like technology and utility. Meme coins are a very exciting yet risky opportunity for investors. If you want to invest in meme coins you should always use a cautious approach while having the speculative nature and volatility of these assets in mind. There are meme coins like Shibu Inu and Dogecoin who have gained popularity but there are many other of these that faded into obscurity just after their initial excitement wears off. You can say that meme coins are more than jokes as they reflect the power of online community, unpredictable nature of crypto market and the social media inference.
