What Are Meme Coins and Is It Worth Buying Them?

What Are Meme Coins and Is It Worth Buying Them?

Reading Time: 6 Minutes

Memes are defined as a type of media that is humorous in nature whereas Cryptocurrencies are defined as digital or virtual currencies that use cryptography for security to maintain secure and decentralised transactions. 

Combined, they make meme coins—sometimes referred to as ‘memetic tokens’—that stand out for their unique blend of humour, internet culture and, surprisingly, investment potential. Interestingly, meme coins have gained substantial popularity among the digital currency trading community and generally have a huge supply (or even an uncapped supply).

The Rise of Meme Coins

The tale of meme coins begins with a joke that originated from internet memes and social media trends; they also often possess quirky names. Yet, against all odds, some of these coins perform well. However, they are usually not backed by any tangible asset or innovative technology (beyond the blockchain tech they operate on, of course).

The real engine behind meme coins isn't their technology but their communities. These digital currencies thrive on social media hype, celebrity endorsements, and viral marketing campaigns. The case of Dogecoin's meteoric rise following tweets by tech mogul Elon Musk, for example, illustrates how influential social media can be. 

Traditional Cryptocurrencies like Bitcoin and Ethereum are created to try to solve problems in the real world by making things like financial transactions faster and decentralised apps possible. But meme coins on the other hand, don't really serve a purpose other than speculative frenzy. Their value depends a lot on how active and positive the community is, which makes them an interesting way to study how society works and how internet culture may also affect the stock market.

Types of Meme Coins

Dogecoin (DOGE): The first or OG meme coin. What started in 2013 as a parody of Bitcoin featuring the beloved Shiba Inu from the ‘Doge’ meme has turned into a Crypto behemoth championed at times by none other than Elon Musk himself. What started as a joke quickly captured the hearts (and wallets) of internet users worldwide.

Shiba Inu (SHIB): This token dubbed itself as the ‘Dogecoin Killer’. It has the same breed of dog in its pictures and has achieved some memorable highlights. SHIB took the internet by storm using a similar dog theme to build a big, dedicated fan base. The people who made SHIB had big plans, and for a while, it looked like it might live up to its name, with skyrocketing growth that convinced people that this coin could 'reach for the moon'.

PepeCoin (PEPE): PepeCoin was made from the iconic Pepe the Frog meme. It was synonymous with the internet culture and unlike the more mainstream appeal of dog-themed coins, the meme coin caters to a small group of people who loved the meme's long and complicated past. Unlike Dogecoin or Shiba Inu, PepeCoin has not reached the same market heights but it still shows how internet memes can drive value in Cryptocurrency.

Floki Inu (FLOKI): This meme coin launched due to Elon Musk's tweet about naming his dog Floki. The coin aimed to capture the magic of Dogecoin's celebrity-fuelled rallies. With a community dubbed the ‘Floki Vikings’, Floki Inu sees itself as a movement that combines meme culture with charity work and a push for usefulness in the Crypto space.

Should You Invest in Meme Coins?

The market capitalisation of top meme coins such as Dogecoin and Shiba Inu has reached billions, indicating a substantial trading volume and liquidity in the market. However, this capitalisation often reflects the strength and enthusiasm of online communities rather than the coin's practical use cases.

Meme coins are highly volatile as well. A simple tweet can make the price skyrocket or plummet and because of this, it makes the meme coin market highly speculative where liquidity can be both a boon and a bane, leading to sudden wealth for some and significant losses for others.

Scams or ‘rug pulls’, as they are known in the Crypto industry, are not uncommon in the meme coin ecosystem, where the lack of regulation and due diligence can lead to significant losses. Plus, the high volatility requires investors to have a stomach for sudden and sharp price movements. When it comes to investing in these coins, always DYOR (do your own research) and never invest more than you can afford to lose.

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