Meme coins have been discussed many a times in cryptocurrency and investments in meme coins require knowledge of them first. So to get into the detail of them, here is a detailed explanation in this article. They are basically meme inspired cryptocurrencies and are highly volatile in nature, when compared with popular cryptocurrencies as Bitcoin (BTC) and Ether (ETH).
This is so as meme coins are the community inspired tokens and its prices are directly affected by social media influence and also by the emotions of online community. This also is responsible for bringing huge amount of hike but at the same time financial risk and FOMO. To this, there is a famous fact that few of the traders became rich with meme coins, but at the same time many of them suffered huge losses due to its volatile nature.
Both Dogecoin (DOGE) and Shiba Inu(SHIB), in 2021 contributed in the growth of Dogecoins and had made its name in crypto world as the year of “dogs” (DOGE) with its rival SHIBA INU (SHIB) also making hike in its price. Where in November, 2021, DOGE had earned 8000% since the starting of the year and holding a rank of #9 by market capitalisation on CoinMarketCap and its rival SHIB on the other hand had gained above 60,000,000% since January.
Detail Analysis Of Meme Coins
Meme Coins are the cryptocurrencies influenced by memes or jokes on internet as well as social media. The very first meme coin was generated as Dogecoin (DOGE). It was launched in 2013 as a joke being inspired by famous Japanese Shiba Inu Dog. Being in a volatile market, their prices are expected to go down also in cases where traders are moving ahead with next meme coin.
These meme coins mostly have large and unlimited supply. For instance, Shiba Inu (SHIB) is having supply of 1 quadrillion tokens, where DOGE doesn’t have any maximum supply and around 100 billion tokens are there in circulation. These tokens don’t have coin-burning mechanism, therefore their huge supply defines their lowered prices. One could end up purchasing millions of meme coins at just $1 USD.
Popularity Of Meme Coins
Specific reasons can’t be given regarding the popularity of meme coin but according to few, the COVID-19 pandemic was one of the cause for its growth as the retail investors desired of beating the inflation. Meme coins also gained its height during that tenure in both ways, in variety and in market capitalisation.
This all initiated only after “meme stock” saga of GameStop (GME) and AMC Entertainment (AMC) in late 2020 and the Reddit community raised the prices of these shares to more than 100 times in few months.
There was a myth rumoured by Reddit group, in January 2021, of shooting up of the price of DOGE for creating a crypto which is equal of GME. Thereby, the trend took its place and DOGE price hiked due to Tesla CEO Elon Musk’s tweets. But at the same time as in May 2021, Elon Musk joked about DOGE publicly on TV, where most of them were of the saying that it was just the result of the price drop. This took the attention of various traders towards other meme coins, as one of the famous one being SHIB “Dogecoin Killer”. Where the retail investors were FOMOing into meme coins, with an expectation of becoming millionaires overnight.
Another way out of the popularity of meme coins, is cause of retail investors get attracted towards them cause they only cost a few cents or fraction of a cent. So the lowered price doesn’t mean more as these coins are having larger amount of supplies. Traders could also benefit by holding thousands or even millions of DOGE, SHIB or Akita Inu (AKITA) tokens with just few dollars.
Also the meme coins are inspired cause of famous Internet memes, considered as fun and many a times ‘inside joke’ for a community. Purchase of meme coins, therefore represent support for their community. When going after the GME stock market saga, meme coin traders were influenced by Reddit group SatoshiStreetBets initiated a “David vs. Goliath” battle to make over, against the mainstream cryptocurrencies.
Risks Surrounding Meme Coins
Although meme coins had grown in 2021, but as other cryptocurrencies, meme coins are also prone to higher financial risk. The following are the risks associated with it:
- Tokenomics of meme coins is of much concern, as for instance Bitcoin is having its blockchain, an established ecosystem, properly written whitepaper, it’s blockchain and deflationary nature. In current years enhanced institutional adoption of Bitcoin is noticed. Also when compared with BTC, maximum meme coins are inflationary, having no maximum supply. Ecosystem of them, use cases and fundamentals are related and explained with the aid of collective jokes of community. Certain meme coins were formed on the technology of major cryptocurrencies. For instance, DOGE’s technology was derived from Litecoin (LTC) and SHIB was made on Ethereum blockchain.
- One more major risk associated with meme coins is their being community-driven and being volatile than huge market capitalisation cryptocurrencies. This nature of being volatile brings them to unexpected frauds of price inflation. Their life cycle is also of short span and prices could probably shoot thousands of times from celebrity shilling or could fall down in an uncertain way and time, where the community is of the thinking of moving on to next meme coin.
- In cases where the meme coin market is on continuous growth, one should stay alert from hype which certain projects could undergo for scamming traders. For instance, SquidGame (SQUID), a meme coin which is influenced by famous NETFLIX show of similar name, went up by around 86,000% weekly. But the development had all of a sudden cause the price to fall down from such a higher level, as by 99% and the bad part of it was that its holders weren’t permitted to sell of their respective SQUID tokens. So be alert, before planning to invest or trade with meme coins.
Famous Meme Coins
The leading market of meme coins is captured by Dogecoin (DOGE) and Shiba Inu (SHIB). With the second half of 2021, due to the success of DOGE and SHIB, huge amount of dog-themed meme coins had entered the market and gained popularity. Following are the famous meme coins till date:
- Dogecoin (Doge): Created in 2013 by software engineers Billy Markus and JacksonPalmer, with inspiration of meme of Shiba Inu dog and was considered as a joke cryptocurrency for attracting the interested traders. Being a fork of Litecoin (LTC), DOGE tends to accept similar Proof of Work (POW) and doesn’t have any maximum supply.
- Shiba Inu (SHIB): It’s popular being the rival of DOGE and is basically many a times mentioned as “Dogecoin Killer”. Where SHIB is also named after Japanese dog breed, being created by anonymous developer Ryoshi in August 2020. Basic difference between DOGE and SHIB is regarding the latter having a limited supply of 1 quadrillion tokens, out of which 50% were burnt and were donated as well to charity.
- Dogelon Mars (ELON): It basically, in close observation, follows doggy duo for being in fame. Going by the name, ELON is named after Tesla CEO Elon Musk and his devotion for his company SpaceX. Where Elon is fork of Dogecoin and is having supply of around 557 trillion tokens.
- Akita Inu (AKITA): Various meme coins are using the Japanese dog breed as their mascots as Akita Inu (AKITA), Kisha Inu (KISHU) and Floki Inu (FLOKI). Where Akita had huge influence of DOGE, being launched on Uniswap as an ERC-20 token in February 2021. Tokenomics is same as SHIB. As the SHIB’s developer Ryoshi, AKITA team had locked 50% of its entire supply on Uniswap and the remaining 50% was given to Ethereum co-founder Vitalik Buterin.
- Samoyedcoin (SAMO): This is again a dog meme coin which is created on the Solanablockchain. With its launch, 13% of SAMO supply was been provided through air to members of the community. The roadmap of SAMO, according to their website, involves burning events, airdrop tools, decentralised exchange (DEX), also creation of NFTs. They had become famous currently cause of a sudden hike in price. Where SAMO had grown by 4300% in a month. As on October 2021, it’s price had gone from $0.005 to round $0.22 in about 30 days.
- Kishu Inu(KISHU): This is canine-themed meme coin and grown exponentially since its launch in April 2021. It involved participation rewards for its active users, a DEX named as KishuSwap and non-fungible tokens (NFTs). It had its holders of around 100,000 and 2 billion dollars market capitalisation within one month immediately after its launch, hence gained popularity.
- SafeMoon (SAFEMOON): This is yet another memecoin which had capitalised on the rally. It’s a BEP-20 token which had launched on Binance Smart Chain (BSC) in March 2021. This coin rewards long term holders thereby putting penalty on those who sell tokens with 10% exit free, where half of this fee would be given equally to existing SAFEMOON holders and on the other hand, other half would be burnt. It had also succeeded in attracting the retail investors attention, immediately after it had rose in April.
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