The meme coin market experienced a massive boom over the past few years, driven by the popularity of NFTs and the growth of the metaverse. Although these sectors were influenced by resistance to change, communities pushed to bring them into the mainstream, offering a starting point.
Dogecoin was inspired by the Doge meme and was endorsed by figures like Elon Musk and other celebrities. From this point on, more dog-inspired meme coins appeared, considering the varied memes on social media, thus allowing the space for Shiba Inu to appear. Then, a different meme coin, Pepe, emerged and shifted people’s interest toward diversity. On Binance, you can check the pepecoin price based on real-time data and charts.
But how did these coins become popular when their market capitalization did not reach considerable heights when compared to Bitcoin and Ethereum? Let’s dive into the factors contributing to the meme coin frenzy.
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How did meme coins appear?
The creation of meme coins is understandable given the playful nature of the cryptocurrency and decentralization industries. Meme coins derive from popular memes that went viral across the internet and pop culture, marking an innovative time in history when simple images were used in specific contexts for comedic purposes.
Dogecoin is known as the first serious meme coin, as not only was it based on a gloriously popular meme, but it was also soon taken seriously by investors, which propelled its fame into the mainstream. Several celebrities were also interested in its potential, and the movement triggered an increasing number of meme coins with similar approaches.
Now, Dogecoin has plenty of use cases as a meme coin, including online purchases, tipping, and trading. One of the best uses for it is donations, as charities accept Dogecoin donations to expand their reach to a broader audience.
What kept meme coins alive until now?
While it’s normal for a new cryptocurrency to perform well in its early years, sustaining interest in the following year is what sets most of them apart. Dogecoin had a large customer base, which gave developers and creators the confidence to continue the saga with similar projects like Shiba Inu. The ERC-20 token is now empowering governments, businesses, and individuals with solutions for identity management, blockchain integrations, and data control.
The Shiba Inu operating system is one of the driving forces of Web3, where it powers up scalable adoption and decentralized rewards within spaces like:
- The Shib Alpha Layer has a high TPS and can achieve sub-100ms finality;
- The Super HUB FUN is a social network with dApps and communities.
- The Shiba Inu Doggy DAO prides itself on one-citizen-one-vote governance;
How diverse are meme coins?
Diversity is one of the leading factors in what make meme coins so special. While they’re not the regular cryptocurrencies used in transactions, developers find various use cases for them and collaborate with others to expand the ecosystem.
This is the case of the Pepe coin, one of the assets with few purposes that found a place for short-term trading through numerous Pepe variations. The cryptocurrency is indeed known for its high volatility, but this encouraged many experienced traders to take advantage of its features, regardless of where these benefits came from:
- McPepe’s is a project that can generate an infinite number of Pepe images;
- PepeMoon is a staking meme coin on the BNB Smart Chain;
- PepeFloki is a combination of Pepe and Floki;
There’s an impressive number of Pepe coins on the market, showing the original coin’s resilience. However, because of a lack of a stable use case, Pepe is mostly leveraged by traders and opportunists who know when to tap in as a new asset enters the market.
Are meme coins suitable for an investor’s future?
Meme coins are considered useless by many investors and even traders, but their value lies in a timely strategy. Dogecoin exploded following media coverage from Elon Musk, and similar occurrences were experienced by most of today’s meme coins.
Meme coins deserve inclusion in investment portfolios and trading opportunities due to their high-reward nature. However, users must be wary of the risks they expose themselves to, such as the following:
- Rug pulls and developer abandonment. Scammers can take advantage of a meme coin frenzy and develop a seemingly true and promising coin project, but they will abandon it following a peak of interest;
- Price crashes due to whale activity. The low liquidity meme coins have made them vulnerable to whales, who own massive amounts of crypto, as they can manipulate prices willingly or not;
- Fake hype from social media. Meme coins thrive on hype, but it must be organic for the project to be reliable. Fake hype is usually caused by pump-and-dump schemes;
Trading strategies for meme coins
Trading meme coins is doable. Choosing a reliable exchange that lists meme coins legally is a good start, followed by setting up a crypto wallet compatible with the coins and their ecosystems. Then, it’s necessary to research meme coin projects by evaluating the whitepaper and ensuring the developing team has been transparent about their project.
Once you’ve got a few meme coins in mind, you can:
- Identifying reliable entry points to improve trade execution by monitoring price action and avoiding impulsive decision-making;
- Placing the trade with market or limit orders, and don’t forget to adjust slippage, as this helps prevent failed transactions;
- Having a risk management strategy that includes stop-loss orders, diversifying your portfolio, and learning to manage risk in highly speculative markets;
- Monitoring price action and market sentiment, especially since meme coins are driven by communities and can be influenced by fear and greed;
Conclusion
Meme coins are popular cryptocurrencies developed by people whose interest in pop culture translated into financial assets. Once Dogecoin won over the internet, numerous other meme coins emerged, showcasing people’s favorite memes and supporting creators. Shiba Inu, another popular dog-based meme coin, and Pepecoin, the asset with the most diverse array of similar assets, entered the market and set the tone for the future of Web3.