Memecoins are cryptocurrencies that draw inspiration from internet jokes and memes, and that’s where they get their name from. When they hit the market, they usually get popular quickly. And their popularity has to do with the fact that most of them adopt meme formats for branding.
Like memes, which use images and witty phrases, memecoins come with a brand image that is captioned fun. For instance, Dogecoin’s logo, featuring the headshot of a Shiba Inu dog, often has humorous phrases like “wow much coin” and “how money so crypto” around it. The memes lend these crypto brands memorability and popular appeal.
Memecoins are as strange as they are fascinating, and they can give you some sudden returns. Whether you’re here out of sheer curiosity or because you are considering investing in them, we have something for everyone in this brief introduction to memecoins.
History of memecoins
The origin of memecoins goes back to 2013 when two software engineers—Billy Markus and Jackson Palmer—created Dogecoin. Initially, Dogecoin was meant to merely poke fun at Bitcoin and other cryptocurrencies. It was even promoted as a “fun and friendly internet currency” and was meant to contrast other cryptos. But Dogecoin’s launch on 6 December 2013, attracted over a million users, an impressive community that affirmed its appeal.
Dogecoin saw its first real spike on 19 December 2013, when it jumped over 300% in value in 72 hours. However, at the time, other major cryptos such as Bitcoin were reeling under China’s decision to ban banks from investing in crypto, and that took its toll on Dogecoin for a while too. As many people flocked to it, Dogecoin crashed, dropping 80%.
Soon after this, there was another notable event in Dogecoin’s history. Dogewallet was hacked on 25 December 2013 and millions of coins were stolen. The incident which attracted international attention, ended up making Dogecoin even more popular, ironically. The coin’s community earned itself when it launched “SaveDogemas,” an initiative to encourage people to donate coins to those affected by the hack.
In 2017, Dogecoin had managed a market cap of $1 billion, and by 2020, Elon Musk’s tweets popularized it even further. That’s when the crypto joke began to be taken really seriously. During this period, various other memecoins, such as Shiba Inu and DogeDash, emerged on the crypto horizon inspired by Dogecoin’s success.
Ironically, Shiba Inu was started as a parody of Dogecoin, earning it the moniker “Dogecoin killer.” Currently, there are over 100 memecoins in the market.
How are memecoins different from other cryptocurrencies?
Bitcoin and Ether are a few mainstream cryptocurrencies that were created to facilitate trading and quicker transactions. These cryptos are thus designed to solve problems, which is what makes them seem reliable and capable of staying.
Memecoins have few ground rules or long-term plans. Some coins even exist just to drive home the idea that crypto has no future.
So, unlike other cryptos, their shelf-life is often seen as short and the hype around them is usually driven by their dedicated communities. The value of memecoins is frequently tied to their popularity, a factor that makes them extremely volatile.
Examples of popular memecoins
Memecoins are emerging rapidly, causing a splash in the crypto world. Some of the most popular memecoins are:
- Dogecoin: Dogecoin was the first memecoin to hit the market. It’s still the most valuable one in the market.
- Shiba Inu: Shiba Inu is a memecoin that started out as an attempt to ridicule Dogecoin. It’s popular in the memecoin crypto world and enjoys the support of a strong community.
- Dogelon Mars: This dog-themed memecoin is named after Elon Musk, one of the crypto world’s most vocal ambassadors.
- Floki Inu: Floki Inu refers to itself as a “movement” and not a memecoin. The coin’s community calls itself “Floki Vikings” after Floki, Musk’s real-life Shiba Inu pet dog.
- Other popular memecoins are Gaming Doge, Kishu Inu, MonaCoin, Samoyedcoin, Hoge Finance, and SafeMoon.
How to identify a memecoin
Memecoins are gaining legitimacy in the crypto world, but because they are based on memes, they are naturally quite different from other cryptocurrencies. Some aspects you can look out for to distinguish between memecoins and other kinds of coins in the market are listed below.
1. Animal-related terminology or imagery
Does what you are seeing look familiar? Popular internet jokes or memes inspire most memecoins, so familiarity is a giveaway. Also, most memecoins like Dogecoin and Shiba Inu are dog-based. So if a coin has a dog or other cute animal-related terminology, it is probably a memecoin.
2. What developers say it does
Another distinctive feature of memecoins is that they lack potential uses or functions as a currency. Their creators don’t put much effort into their utility. They usually claim that they use the “power of memes” to create “good.”
3. Social media presence
Memecoins live on social media. It is there that they get support from fellow meme lovers. They rely on social media’s ability to make ideas go viral, and their popularity is driven by strong community support.
4. Ownership behind most of the coins
Memecoins are often owned by small groups of people. Their centralized ownership structure helps owners make decisions that affect price action. Other coin owners are usually small-scale; these are people who have added a few coins to their portfolio because they want to buy into the next “big crypto.”
Memecoins: Are they safe?
While some memecoins like DOGE have gained mainstream value, most of them are not created with any practical use in mind. For serious investors who wish to earn from crypto assets, memecoins are not safe choices given their volatility and short lifespan.
Some have even referred to memecoins as “scam coins.” That may have something to do with the fact that memecoins are often created to enrich their creators. After they are introduced, they show promise of growth but once they get valuable enough, some dubious creators and investors of memecoins dump their holdings to cash in on the funds. And ordinary investors end up losing their funds in the process.
So, if you wish to invest in memecoins, you will need to carefully evaluate the project website and do a lot of research first. Reviewing the developer team goals, targets, records, and the validity of liquidity pools usually helps.
Why do people invest in memecoins?
Memecoins are rather volatile, so why do people invest in them? Memecoins are speculative, but the ones that become popular can experience a significant growth in value, which is great for its early adopters. People thus invest in them precisely because of their volatility and the splendid returns they can occasionally yield.
Dogecoin and Shiba Inu are examples of memecoins whose value has quadrupled over time. However, this might not always be the scenario since some memecoins rise, fall, and disappear into oblivion within a short time.
Tips to keep in mind while you invest in memecoins
While investing in memecoins, you would do well to take a few factors into consideration.
- What’s the cost? Memecoins can rise in value over time and even go mainstream. So, if the price is affordable, you could think about purchasing early. Doing so will give you a favorable market position.
- How much are you willing to risk? Another important thing is to consider how much money you’re willing to lose. Only invest funds that you wouldn’t miss, because memecoins are volatile and speculative. A boom today can be followed by a big market dip in a week!
- Who is endorsing the memecoin? There’s no question that communities help memecoins gain popularity. But, to achieve mainstream success, memecoins need endorsements from celebrities and big businessmen. Think Dogefather Elon Musk. If you notice a popular celebrity staking their reputation to promote a memecoin, that may be a good start.
- How long will it last? Most memecoins enter the market and are popular only for a short while. Soon, they are likely to fade away, paving the way for the next popular meme and memecoin. Do your research to find out if people are talking about it.