Meme coins, also known as meme crypto currencies, are a unique subset of digital currencies that have gained popularity in the cryptocurrency space. They often use humorous or meme-inspired themes and are typically seen as fun, highly speculative investments. Memecoins were born from internet humor and cultural references and have become a cryptocurrency phenomenon. They’ve gained massive followings and made headlines with their volatile prices. However, their long-term future and the influence of meme culture on finance raise important questions.
In essence, the future price of any meme coin heavily relies on the community that backs it and its popularity at any given moment. Meme coin communities play a crucial role in spreading news about the coin, attracting new investors to invest, and even causing a coin to go viral. All these help drive its price.
In this article, we will explore whether meme coins have a promising future or might experience an unforeseen change or decline. This suggests that while meme coins may seem interesting or profitable, their future could be uncertain and subject to sudden shifts. Let’s get to know more details about meme coins.
What are meme coins?
Meme coins are a type of digital currency, which means they exist only in a digital format and are not physical like traditional money. Like other cryptocurrencies, these additional coins are used for online transactions. You can buy and sell goods or services using meme coins, and they are often used for tipping or donations on social media platforms and other users.
You can buy meme coins on various cryptocurrency exchanges (similar to buying cryptocurrencies and other assets). They can be traded against other cryptocurrencies or traditional fiat currencies on many exchanges and trusted third party sites. Some of the top meme coins include Dogecoin, Shiba Inu, and Baby Doge Coin.
These coins often have meme-inspired logos and marketing campaigns. Just like other cryptocurrencies, they are stored in hardware wallets or digital wallets. These wallets are secured by private keys, which are essential for access and control over your virtual assets.
Also, meme coins typically operate on decentralized blockchain networks, meaning they are not controlled by a single entity or government. This decentralization is a key feature of most cryptocurrencies. Meme coins are often considered high risk investments because their value can be extremely volatile, as they lack the utility and stability of more established virtual currencies like Bitcoin or Ethereum. While meme coins are not as widely accepted as Bitcoin for mainstream transactions or trade, some businesses and platforms do accept them. This acceptance is growing, especially in online communities.
When you buy and sell meme coins on centralized exchanges, you may be subject to exchange commissions or fees. These fees can vary depending on the exchange and the specific transaction. Like all cryptocurrencies, they rely on a public ledger called a blockchain to record transactions. This ledger is transparent and immutable, providing a record of all cryptocurrency transactions.
Meme coins are considered virtual assets, as they exist only in the digital realm. Their value is determined by supply and demand in the market. Some meme coins may offer additional features or rewards, such as staking, which allows you to earn more coins by holding and locking them in a digital wallet. These coins have attracted a wide range of crypto investors, from those looking for quick and highly speculative gains to enthusiasts who appreciate the humor and community aspects.
Unlike regular cryptocurrencies like Bitcoin or Ethereum, meme coins don’t have practical applications. Social trends and online communities are primarily what drive them. Nevertheless, their importance and adoption can’t be overlooked. Several businesses and platforms like Futureplay have accepted a few of them as a means of transaction.
Meme coins are known for their playful and sometimes silly themes, which appeal to internet users and meme enthusiasts. They often satirize established cryptocurrencies and traditional financial systems. Meme coins are, therefore, highly speculative, and due to online sentiment and meme culture, their value can be very unpredictable.
Types of meme coins
Examples of meme coins include Dogecoin (DOGE), Shibu Inu coin (SHIB), and Floki Inu coin (FLOKI). These coins gained popularity through internet memes, social media buzz, and endorsements by celebrities rather than through traditional investment factors. However, it’s essential to understand that meme coins are considered risky investments within the broader crypto currency market.
There are several types of meme coins, and they often overlap. To provide a basic framework, we can categorize them into the following groups:
Internet Meme Coins/Tokens: The first of these was Dogecoin, and another example is PEPE, based on the Pepe the Frog meme, which became popular in 2023.
Dog-Themed Tokens: Following the success of Dogecoin, more tokens were created to cater to the crypto community’s love for dog-themed tokens. The most popular one is Shiba Inu (SHIB), and there are others like FLOKI (named after Elon Musk’s Shiba Inu dog) and Samoyed Coin (SAMO).
Tokens Linked to Other meme coins: Some meme coins directly reference other meme coins. For instance, Doge Killer (LEASH) and ShibaSwap’s BONE are tokens connected to SHIB’s ecosystem. Others add a “2.0” label to existing tokens, hoping to gain a following from the original community.
Pop Culture Tokens: In 2022, as advances in artificial intelligence (AI) gained attention, several AI-themed meme coins emerged. Additionally, tokens with names related to well-known figures like Elon Musk and Jesus have gained recognition. In 2023, the news about a possible new superconductor called LK-99 led to the creation of various “superconductor” and “LK-99” meme coins.
What Led to the Popularity of Meme Coins?
In 2013, Dogecoin became the first meme coin. It started as a joke based on the famous Doge meme with a Shiba Inu dog. This cryptocurrency adopted a friendly and humorous persona, quickly amassing a devoted fan base that embraced it for tipping, charitable donations, and amusement. Notably, Dogecoin also caught the eye of well-known figures like Elon Musk, who often tweeted about it, causing higher demand and price increases.
Due to Dogecoin’s success, numerous other meme coins followed suit, attempting to replicate its formula or carve out their unique niches. Some took inspiration from various animal memes, like Shiba Inu, Dogelon Mars, Samoyed Coin, and Floki Inu. Others got their ideas from pop culture, such as Pepe, HarryPotterObamaSonic10Inu (a mix of fictional characters), CumRocket (an adult-themed token), and MonaCoin.
The popularity of meme coins can be attributed to several factors, as seen below:
- They offered an accessible entry point for novice investors, as they were affordable, easy to purchase, and promised the potential for substantial returns.
- Secondly, they appealed to the emotions and humor of the crypto community. They served as a source of entertainment through memes, jokes, and social media buzz.
- Lastly, they leveraged the network effect and the bandwagon phenomenon. More and more people joined in the excitement, leading to increased demand and higher prices.
The year 2023 marked a significant period for meme coins, witnessing a surge in interest and investment from retail and institutional investors. Several contributing factors were behind this trend:
- Dogecoin’s widespread adoption received a boost, which came from endorsements by celebrities and influencers like Elon Musk, Mark Cuban, and Snoop Dogg. In July 2023, Dogecoin reached an all-time high of $0.82, making it the fourth-largest digital token by market capitalization.
- Other digital assets emerged, taking advantage of Dogecoin’s and other internet memes’ popularity. These included coins like Shiba Inu, Pepe, AiDoge, Wall Street Memes, and Thug Life. These coins introduced diverse features and use cases, such as meme creation, NFTs (non-fungible tokens), gaming, social media integration, and charitable endeavors. Some also implemented innovative tokenomics, incorporating deflationary mechanisms, redistribution schemes, and unique governance models.
- Meme coin ecosystems were developed, offering users access to Web 3.0 tools and services. These included decentralized system for exchanges, lending platforms, metaverse environments, and decentralized autonomous organizations (DAOs).
For instance, Shiba Inu launched its decentralized exchange called ShibaSwap. Dogechain enabled the Dogecoin currency holders to participate in DeFi (decentralized finance) activities, and Wall Street Memes introduced a collection of NFTs inspired by memes.
What Caused Some Meme Coins to Lose Their Popularity?
When it comes to meme coin popularity, not all of them have managed to sustain or maintain their value over time. Several of them encountered significant challenges, including:
Innovation
A notable issue among meme coins was the absence of innovation. Many coins were essentially copies or derivatives of existing cryptocurrencies, offering nothing unique or distinct regarding features or use cases. Their appeal primarily relied on memes, which can quickly lose relevance as new trends emerge in the crypto space.
Sustainability
The inadequate tokenomics and governance models used by many meme coins were another widespread issue. These shortcomings made them susceptible to inflation, dilution, manipulation, and fraudulent schemes. Some meme coins suffered from high transaction fees and low liquidity, rendering them impractical for trading or everyday use.
Regulation
Many meme coins operated within a legal gray area, lacking clear rules or oversight from regulatory authorities. This exposed them to various legal risks, including potential bans, lawsuits, or investigations. The absence of a regulatory framework made it challenging for investors to gauge the legitimacy of these coins and added uncertainty to their prospects.
Meme Coin Price Determination
Determining whether a meme coin will increase or decrease in value can be tricky. Meme coins are usually inexpensive and readily available because they aren’t highly valued, and many are in circulation.
When evaluating the potential of a meme coin, it’s crucial to look at its community and associated influencers. A strong community and support from influencers are positive indicators.
If a meme coin finds applications in video games or as a currency in popular online stores, it becomes more appealing to investors. Also, when a meme coin is utilized as an NFT (non-fungible token), it gains appeal among investors. This is because the coin gains extra value beyond being a meme, making it a potentially profitable investment.
Are meme coins the future, or Will they Face an unforeseen decline?
Meme coins are well known for being unpredictable and volatile because the cryptocurrency community’s emotions and sentiments largely influence them. Their value can change quickly and significantly due to excitement, humor, and current trends. As a result, it’s tough to forecast the future of meme coins in the cryptocurrency world.
Nonetheless, several factors may play pivotal roles in shaping the future of these digital assets:
Compliance
Meme coins that commit to following the legal and regulatory standards of various countries increase their odds of avoiding legal problems or potential bans. Notably, select businesses and organizations now accept Dogecoin as a payment method.
Community
Meme coins with strong and loyal support communities will likely survive and grow. For instance, Dogecoin boasts a sizable and active fan base that utilizes it for purposes like tipping, charitable contributions, and entertainment.
Quality
Meme coins that continually enhance their quality or utility can attract and retain users more effectively. For instance, Floki Inu actively supports a charity co-founded by Kimbal Musk, Elon Musk’s brother, to advance urban gardening projects.
Ultimately, meme coins thrive on renewed interest and speculation. When a well-known cryptocurrency exchange lists a meme coin, it gives it a fresh boost.
The situation is similar when celebrities talk about meme coins on social media. What’s crucial is that some traders, called “degens,” see meme coins as a fast way to make money in the crypto market.
However, the inflow of new meme coin entrants will eventually slow down. Meanwhile, numerous blockchain projects offer substantial long-term potential.
In addition to those already listed, you can consider cryptocurrencies like Polkadot (DOT), Terra (LUNA), Avalanche (AVAX), Celo (cGLD), Radix (DLT), and many others. Not to mention the metaverse coins designed for Web3 gaming.
While these alternatives have their own price fluctuations, they provide tangible value and solve real-world problems. The same cannot be said for meme coins.
Is Investing in meme coins a Good Idea?
Based on reports from lots of news outlets like Futureplay, numerous meme coins have led retail investors to significant losses. Popular ones like Dogecoin and Shiba Inu have dropped 91% and 84% from their peak values, respectively. These meme coins, unlike Bitcoin, often have a high or unlimited supply.
For instance, there are over 140 billion DOGE coins in circulation, with around 10,000 new DOGE mined every minute. In contrast, Bitcoin mines about 6.25 BTC, valued at approximately $164,164, every 10 minutes.
Additionally, meme coins usually lack mechanisms like “burns” to remove coins from circulation, leading to a continuous increase in the number of coins available. For example, Shiba Inu currently has over 590 trillion coins in circulation.
While Dogecoin and Shiba Inu are considered success stories among meme coins, most of them eventually fade into obscurity. Many of the meme coins from 2013–2014, for instance, no longer traded and caused substantial losses for speculators.
Despite meme coins’ difficulties matching Dogecoin or Shiba Inu, the potential for profit and the fear of missing out kept many people interested. This was especially evident during the bull market frenzy of the past year.
However, this doesn’t deter retail traders from trying to strike it rich with meme coins. It’s essential to view these as speculative gambles rather than investments.
Are meme coins Safe?
Memes in the cryptocurrency world can have a darker side. They are very unstable, often losing much of their value quickly. Creators, often anonymous, have faced accusations of bad intentions. Some founders create new coins, control all the supply, and focus on generating hype to sell their holdings.
Buyers of these tokens can be unsuspecting retail investors who don’t fully understand how these tokens work. They might only see paid celebrity endorsements on social media or fake activity that makes it seem like the asset is popular.
There’s another issue, too. A small group of people with many meme coins primarily own them.
For instance, just seven crypto wallets control 48% of DOGE. With 15 wallets holding 69% of the total, it is even more extreme for SHIB.
Because of this concentration, a big investor could manipulate the market or crash the price when they sell their holdings. In short, making money with meme coins is possible, but it’s risky. They’re much more unstable than popular cryptocurrencies like Bitcoin and Ethereum, and their value can drop dramatically overnight.
In conclusion, people who like meme coins may discover more rewarding options in infrastructural, metaverse, and gaming coins which could help with free gaming at Futureplay with real value.
Meme coins, like many other new altcoins, will continue to exist. However, the future of a meme coin depends on its ability to build a strong community and remain culturally relevant. Additionally, it should offer some form of value to its holders, whether through a simple and humorous joke or a perceived value.
Conclusion
Meme coins are a unique and often high risk segment of the cryptocurrency market. While they may not have the same level of adoption and utility as more established virtual currencies, they have gained popularity due to their entertaining and meme-driven themes. As with any investment in the crypto space, it’s essential to conduct thorough research and understand the risks associated with meme coins before investing.
