From silly beginnings to surprising success, meme coins have overtaken crypto becoming some of the most known assets. This prompts the question - are they just a passing trend, or do they actually offer something valuable? Let's take a look at it below.
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These coins started out as a joke but have since grown to become one of the most popular in the cryptocurrency world. According to CoinMarketCap, Dogecoin, the most popular memecoin, is now one of the top ten in terms of market valuation. If someone had invested $1,000 in Dogecoin in March 2019 and sold it in May 2021, they would have earned $344,000.
However, it's not always that simple - many people have also lost a lot of money on meme coins. Let’s have a look at why that happens.
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Before we talk about popular meme coins, let's first explain what meme coins are. Meme coins are a kind of digital money that’s based on funny or popular internet memes. Memes are jokes or interesting things like pictures, videos, or phrases that spread quickly online and on social media. In other words, memecoins are digital currencies inspired by specific internet jokes and memes.
We'll examine three well-known meme coins: Dogecoin, Shiba Inu, and Pepe, and see how they've changed over time.
The popular meme coin Dogecoin is inspired by a meme showing a Shiba Inu dog with odd captions, it was developed in 2013 as a joke. Programmers Jackson Palmer and Billy Markus created the coin in order to have fun with the rising number of coins at the time. Though initially "jokey," Dogecoin shot off right away, particularly following Elon Musk's tweets on it and increased visibility.
Dogecoin’s popularity also grew because of its community’s charity efforts, like raising money to help send the Jamaican bobsled team to the 2014 Winter Olympics and funding clean water projects in Kenya. Today, Dogecoin is actually one of the top cryptocurrencies, ranking 8th on Coinbase and 9th by market value, with a market cap of about $10 billion.
However, meme coins like Dogecoin don’t have a solid foundation behind their value. Their prices often depend on internet trends and what celebrities say. For example, Dogecoin hit its highest price of over 76 cents in May 2021, but since then, it has dropped to just over seven cents. In 2023, its price barely changed, which is unusual for such a volatile asset.
Another widely recognized meme coin is Shiba Inu (SHIB), which is worth over $4.5 billion and accounts for around 0.18% of the cryptocurrency market. Ryoshi, who invented it in 2020 as a direct reaction to Dogecoin, is frequently referred to as the "Dogecoin Killer." The Japanese Shiba Inu dog serves as the mascot for both coins.
The coin was intended for broad ownership since Ryoshi wants SHIB to be equitable and community-driven. SHIB has developed into an ecosystem that consists of a DEX called ShibaSwap and a technical document dubbed the "woofpaper," which describes its objectives.
Like Dogecoin, SHIB’s popularity has dropped from its peak. In October 2021, SHIB reached its highest price of $0.00008251, but since then, its value has fallen by nearly 90%. There was a brief price increase in January 2023, but it soon dropped again to levels similar to late 2022.
PEPE was created in 2021, inspired by the popular internet meme "Pepe the Frog." It runs on the Ethereum blockchain, which allows for quick and easy transactions. As of now, PEPE ranks around 72nd among cryptocurrencies, with a market value close to $600 million.
PEPE is a deflationary token, meaning its total supply goes down over time. A small fee is taken from each transaction, and part of that fee is permanently removed from circulation, which helps reduce the number of coins available.
Thanks to the popularity of the Pepe meme, the coin’s value quickly shot up, reaching a market cap of $1 billion shortly after launch. However, its price dropped by 40% within just a few days and settled at around $600 million.
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Let’s wrap up what meme coins are and why they exist. Are they just a way for their creators to get rich? Or, is it true that their popularity is overhyped, maybe even tricking people who “don’t know better”?
The majority of critics think that meme coins lack a solid base and long-term worth. Despite that, there are some pros to consider. To begin, their prices can change quickly, which can be good for skilled traders who buy and sell quickly to make money. These funny memes can quickly become quite popular, and if you're good at timing your trades well, you could make a lot of money.
Another good thing about meme coins is that they get new people interested in cryptocurrencies and help them learn about blockchain technology. This could be the first step toward finding more opportunities in the future internet, like gaming sites or virtual worlds.
Positives aside, it’s important to remember that meme coins come with extremely high risks. When things go wrong, it can hurt the reputation of cryptocurrencies and make people more cautious about investing in them.
So, you should take the time to learn about cryptocurrencies like memecoin before putting your money into them - you could actually lose your money. Investing in crypto is risky, and everyone should decide based on their own situation and how much risk they’re comfortable with.
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