Memecoins: The Story of Culture, Community & Cryptocurrency

1) What Are Meme Coins?

Meme coins are a category of cryptocurrency that originate from internet memes or jokes rather than serious technological or financial innovation. A few of of the most prominent examples isDogecoin, PEPE, WIF & TRUMP. According to Investopedia, Dogecoin was created in December 2013 as a parody of Bitcoin. Its logo, featuring the Shiba Inu dog from the “Doge” meme, helped it gain traction as a fun and approachable cryptocurrency. Another notable example is Shiba Inu Coin, which emerged as a competitor to Dogecoin and has built a substantial following. CoinMarketCap details that Shiba Inu Coin, often referred to as the “Dogecoin killer,” leverages the popularity of meme culture and has developed a significant community around it.

2) Purpose of Meme Coins

The primary purpose of meme coins often extends beyond simple investment. They are used tobuild and engage communities around shared humor and cultural references. Cointelegraphhighlights that the community aspect is crucial for the success of many cryptocurrencies, particularly meme coins, this is particularly driven since there is NO fundamental use case that MEME coins provide.

Investors are drawn to these coins for speculative reasons, driven by the possibility of rapid gains in value due to market hype and social media influence. Forbes explains that the speculative nature of these assets attracts investors who are looking to capitalize on price volatility, often fueled by social media buzz and FOMO (fear of missing out).

3) What’s the Combined Value in Market Share?

The market capitalization of meme coins reflects their significant impact on the cryptocurrency market. Meme coins that made it to listing platforms such as Coinmarketcap.com combinedhave a Market cap just under $50BN. Memes have been seen to taking over the retail interest in crypto currencies as an investment asset, where MEMEs have had the most growth compared to any other area of crypto. The most notable areas of growth and popularity are: Layer 1’s (Bitcoin and Ethereum, Layer 2’s ( these are projects built on Layer 1’s to improve theshortfalls of L1’s and providing greater value to those blockchains), Gaming Projects, AI projects, Real World assets and DEPIN.

4) Why Are People Investing in Meme Coins?

Investors flock to meme coins for several reasons:

 Hype and Speculation: Meme coins often attract attention due to their viral nature on socialmedia platforms. Investopedia discusses how speculative investments are driven by the excitement and anticipation created by online communities and media.

Community Engagement: The sense of community around meme coins enhances their appeal. The power of cryptocurrency communities is significant, as outlined by Cointelegraph. These communities create a supportive environment that can drive the value and visibility of meme coins to different levels and investors have notably made gains in the 10’s of Multiples.

FOMO (Fear of Missing Out): Many investors are motivated by the fear of missing out onpotential gains. Trading Psychology explores how FOMO influences investment behavior, particularly in volatile markets like those for meme coins.

Low Entry Barrier: Meme coins often have a low entry price, making them accessible to abroad range of investors. CryptoSlate explains that this low barrier to entry can attract new investors looking to dip their toes into the cryptocurrency market.

5) Is There a Future for Meme Coins?

The future of meme coins is debated within the crypto community. On one hand, their continued popularity and community support suggest they could remain relevant. CoinDesk discusses howmeme coins could potentially integrate with decentralized finance (DeFi) platforms, which might provide them with more utility and sustainability. On the other hand, there are concerns about their longevity and the risk of obsolescence. Bitcoinist argues that the speculative nature and lack of inherent value could lead to these coins fading from prominence as market trends shift.

6) What Has Driven These Tokens to Get to Where They Are?

Several factors have contributed to the rise of meme coins:

 Social Media Influence: Social media platforms play a significant role in amplifying the visibility and popularity of meme coins.

TechCrunch highlights how viral content and social media trends can drive the adoption and market value of these coins.

Celebrity Endorsements: High-profile endorsements, such as those by Elon Musk, have significantly impacted the value of meme coins like Dogecoin. CNBC provides insightsinto how celebrity tweets and endorsements can create significant fluctuations in cryptocurrency prices.

Community-Driven Movements: The success of meme coins is often driven by strong, enthusiastic communities. Crypto Briefing discusses the impact of these communities on the growth and stability of meme coins.

 Speculative Trading: The speculative nature of meme coin trading contributes to theirvolatile price movements. HuffPost explores how speculative trading strategies affect thevalue and market dynamics of meme coins.

7) Why Are Memes So Popular?

 The popularity of memes, including those related to cryptocurrency, stems from their relatability and humor.

 Memes often capture cultural moments and resonate with a broad audience, drivingengagement and sharing. The Atlantic delves into why internet memes, including meme coins, have become a significant aspect of online culture.

7) How Many Meme Coins Are There?

The number of meme coins in circulation has grown rapidly. CoinGecko provides an extensive list of meme coins, illustrating the diversity and proliferation of these tokens in the market.While Coinmarket cap lists over 1400 Meme coins, over 600,000 meme coins have been launched on Solana Blockchain as at 1st July 2024.

8) What Kind of Money Is Being Made Buying and Selling Meme Coins?

The potential for profit in trading meme coins is notable, but so is the risk. While there are 1000%’s have been made on meme coins upon launch for those that catch the wind;

Millions of dollars have gone down the drain by whales(Large holders of crypto tokens)dumping their tokens in the market, soaking up liquidity.

9) Should Someone Get Into Meme Coins?

Investing in meme coins can be enticing but comes with substantial risks.

Investopedia advises that investors should approach meme coins with caution, consideringtheir high volatility and speculative nature before including them in their investment portfolios.

Given their high-risk nature, meme coins should constitute only a small portion of a diversifiedinvestment portfolio. Investing 1-3% of portfolios seems to be the most realistic and conservative method of investing into Meme coins.

10) How Do You Know When to Exit?

Determining the right time to exit an investment in meme coins involves analyzing markettrends and signals along side being seated at your screen. Cointelegraph provides strategies fortiming exits based on market conditions, trading volume, and news events, helping investors make informed decisions about when to sell their holdings.