Dogecoin is based on the “doge” meme, which features a Shiba Inu with gibberish supposedly expressing its thoughts.
Dogecoin isn’t serious money, but we’ll explain it later. Its market valuation peaked at $70 billion, surpassing FedEx, Marriott, Activision-Blizzard, BMW, and many other global businesses. Dogecoin is the most widely used cryptocurrency with over 132.67 billion in circulation. At the time of writing, its market value was roughly $10 billion, which is a lot for a joke.
So, Memecoins, What Is It?
“Memecoins” are coins with no use case, because of that, they are considered by many to be “shitcoins”. Even so, there are also plenty of shitcoins worth investing in. In contrast to popular belief, all meme coins are in fact altcoins.
Altcoins are non-bitcoin cryptocurrencies. Ethereum, the second-most valued cryptocurrency, is the most valuable alternative coin.
Meme currencies, unlike Bitcoin and Ethereum, are tributes to memes, which have become popular via visual media like photos and videos. Meme coins, like internet memes, are supposed to spread.
Market leader Dogecoin (DOGE) was created as a parody of Bitcoin and other major cryptocurrencies. Two software developers, Billy Markus and Jackson Palmer, constructed it without a purpose. Most “meme currencies” exist only for trade. They’re useless in business.
As of March 2022, Dogecoin (DOGE) and Shiba Inu (SHIB) are the most popular meme currencies.
Meme Coins—What’s A Big Deal?
WallStreetBets, a Reddit community, artificially inflated “meme stocks” like GameStop (GME) and AMC Entertainment (AMC) by 100 times in a few months in late 2020. A January 2021 subreddit discussed artificially inflating DOGE to create a cryptocurrency counterpart of GME. As Elon Musk’s tweets supported this idea, DOGE soared. Dogecoin reached a new high of $0.73 in five days, rising roughly 2,000%. Elon Musk controls the Dogecoin price. In 2021, he called Dogecoin a “hustle” on “Saturday Night Live,” lowering its value by 40%.
Investors then turned to meme currencies like Shiba Inu, the “Dogecoin killer.” Retail investors with FOMO (fear of missing out) bought meme coins hoping to become overnight millionaires, causing another meme coin bubble.
Retail investors, especially younger ones, like meme coins since they cost a few cents. Thus, everyone can participate, even if they don’t have much money, with the promise of hundreds of percent returns.
Due to their cheap costs, even a little investment can net hundreds or millions of DOGE, SHIB, or AKITA tokens. SHIB tokens cost 0.00000011 as of this writing. Thus, $11 buys a million SHIB. $11 only buys 0.006 ether or 0.0003 BTC. Millions of a meme currency can be distinct from a small percentage of ether and bitcoin.
Meme Coins’ Uses
Meme currencies are community-driven coins. Their pricing is generally set by social media opinion since they have no apparent business function. This can be exciting, but you can feel left out and lose money.
Ethereum and Bitcoin have financial uses. Ethereum is a decentralized dApps platform like iOS, whereas Bitcoin is a P2P payment network. Bitcoin and Ether are genuine, but their values are more volatile than conventional currencies.
Meme coins, which have no practical use other than trading, are very volatile due to popularity. After Musk and Cuban embraced Dogecoin, its value skyrocketed. As enthusiasm faded, it decreased. Meme coins are volatile, so investors can profit or lose everything.
Several nations are controlling meme currencies. Meme coins were banned by the Thailand Securities Exchange Commission in early 2021.
Great products and services must have economic value, much like investing theories. Social media-based meme currencies may lose value. Changes may help meme currencies.
Meme coins now buy more. “The Mavs have elected to accept Dogecoin as payment for Mavs tickets and products for one very essential, earthshaking reason, because we can,” declared Dallas Mavericks owner Mark Cuban in March 2021. “We can”
Cuban is’t alone. Dogecoin and Shiba Inu are accepted by 10 companies, including GameStop, Newegg, Nordstrom, Tesla, and AMC Entertainment. Expect more. Meme coins gain value as they become more commonly used as currency.
This initiative is creating “utility meme currencies”. Pawthereum’s little purchase price raises tens of thousands for animal groups. Floki Inu is another crypto education center, NFT marketplace, and metaverse game.
Meme coins combining the virality and fun of meme culture and the practicality of cryptocurrencies have the best chance of survival.
Meme coins may seem like a great investment, but you need to look beyond the hoopla and consider their long-term economic value. After the initial enthusiasm, its price may drop if it’s just used for trade.