Meme Coins: Separating the Hype from Investment Reality

Cryptocurrencies have gradually evolved from being a novelty, with more and more investors buying in.   

While much of the attention has focused on popular cryptocurrencies such as Bitcoin and Ethereum, a slew of fresh coins has emerged in recent months and grouped under the moniker meme coins.

Cryptocurrencies like Dogecoin (DOGE) have created a lot of buzz in the crypto world, and some people have made a lot of money off of them. But does this make meme coins a wise investment?

Meme coins are cryptocurrencies that have garnered rapid popularity as a consequence of influencers and retail investors supporting them online. Dogecoin is the first meme coin, developed in 2013 as a joke based on a meme. It gained popularity once Elon Musk began tweeting about it, and regular investors began adding it to their portfolio. As a result, one Dogecoin is now worth $0.27.

Because anybody may establish a new cryptocurrency, many meme currencies have sprung up in the wake of Dogecoin. Many of these currencies are Dogecoin spinoffs, for example, Shiba Inu SHIB/USD, worth $0.000054. Still, there are a hundred more meme coins out there, with approximately 5,000 listed on CoinMarketCap.

The Biggest Meme Coins of 2021

Before we delve into the gist of the article, we feel it is necessary to better comprehend the most popular meme coins that exist on the market right now. The top four we think are worthy of checking out are:

Dogecoin

Dogecoin DOGE/USD was created back in 2013 as a joke by two software engineers. No one expected it to gain so much popularity and even spark a trend – meme coins. In May 2021, the coin reached a market capitalization of more than $85 billion. Elon Musk is the one to thank for Dogecoin’s popularity, as his tweets were the ones that brought it to people’s attention.

SafeMoon

SafeMoon SAFEMOON/USD was created in March 2021 and saw a quick rise in popularity thanks to celebrity endorsement as well. From rappers to YouTubers to sports bloggers, SafeMoon managed to gain over one million holders over a short span. The coin has reached a market capitalization of over $2.4 billion.

Shiba Inu

Shiba Inu (SHIB) is a token created in August 2020 by an anonymous entity known as Ryoshi. An interesting thing about this token is that it was referring to itself as the Dogecoin killer, but it has not yet managed to take too many investors away from the very popular meme coin. Shiba Inu coin sits at a market cap of over $29,4 billion.

TORG

TORG TORG/USD is a very new meme coin, launched in July 2021, that aims to do things better than its predecessors. The coin was created as the first utilimeme – a meme coin with real-life utility. Its creators want to turn TORG into a people’s coin, out of the reach of banks and governments, allowing the under- and unbanked to benefit from it in a variety of use cases. In just a few months, TORG has reached a market cap of over $2,36 billion and continues to rise.  

Why Invest in Meme Coins Anyway?

Even though we still have to wait around and see what the fate of meme coins will be, it does not mean investors can’t ride the wave and make profits during this time. Meme coins can be a very nice addition to an investor’s portfolio, but only if they are properly selected and assessed. Here are some of the biggest advantages of these coins:

• Chosen wisely, they can have huge investment potential

There are thousands of meme coins out there, but not all of them are worth investing in. However, a few popular coins managed to gain a lot of traction and seem to carry a lot of potential. Experts advise staying away from coins that have an unlimited supply and can be mined abundantly, such as Dogecoin, as their value can quickly drop. Instead, focus on coins with a limited supply, such as TORG. This way, market transactions are the ones controlling the price, and you can make better predictions. 

• Beginner crypto traders can use them to practice due to their cheap prices

Crypto investments can be frightening for beginner investors. You wouldn’t want to spend thousands of dollars on one bitcoin only for the market to plummet unexpectedly and leave you guessing when the prices are going to rise again. Most of these meme coins have a low value and allow investors to buy a significant amount that they can experiment with to learn the ropes and improve their investment strategy.

• They appeal to young, tech-savvy audiences who love Internet culture

Some millennials have gone as far as to call bitcoin “boomer coin”, considering its era a faded phase. They are far more interested in meme coins and altcoins and this can only mean good things for the meme coin market. Blockchain technology is still in its infancy, and if a coin wants to be dominant in the future, it needs the attention of young investors. Investing in coins that attract younger generations means ensuring you stay in this race for the long run.  

Any Noteworthy Shortcomings from Investments in this area?

• They present more risks than other crypto assets

Because meme coins were not initially created with a useful purpose in mind, there are quite a few risks involved with investing in them. They don’t adhere to the same principles as traditional crypto coins do, which means investors need to strongly monitor price movements and be on the looks for any potential surge in demand that they can take advantage of. Plus, you never know when the hype magically disappears.  

• Meme coins don’t have much utility - or do they?

As we mentioned, most meme coins have no real utility but to be traded and mined. You can’t use them to purchase things, and they can’t be utilized in smart contracts either. However, some like TORG promise to change that and turn meme coins into something more valuable.

Bottom Line

Meme coins are now receiving a lot of attention, mainly thanks to prominent opinion leaders and younger investors, who make Dogecoin and its pals gain a lot of traction. Smarter investors are also profiting from these popular cryptocurrencies, riding the price movement wave to victory.

However, these coins are built on a fragile foundation because their value is based on meta-humor and community attention rather than a balanced sheet or business strategy. While TORG promises to change that and bring meme coins a real value, it is worth noting that investors need to carefully consider their actions and only invest in reliable opportunities.