Cryptocurrencies
24
Apr
meme coins

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What are meme coins?

Meme coins are a new class of cryptocurrencies that have gained popularity in recent years. Dogecoin and Shiba Inu are the most popular meme coins.

Dogecoin was created in 2013 by two software engineers, Billy Markus, and Jackson Palmer, as a joke based on the popular “Doge” internet meme. Shiba Inu is a cryptocurrency that was created in August 2020 by an anonymous individual known as Ryoshi.

Investing in meme coins, such as Dogecoin or Shiba Inu, can have both positive and negative aspects. The future of meme coins is uncertain, but it is likely that new meme cycles and themes will emerge.

What are meme coins?

Meme coins are a new class of cryptocurrencies that have gained popularity in recent years. These coins are characterized by their use of internet memes and social media to drive awareness and hype. Examples of meme coins include Dogecoin and Shiba Inu, which saw massive price increases in the bull market of 2021.

For a long time, Dogecoin used to be the only real meme coin. It was ranked around 30th to 50th in terms of market cap. All changed in 2020 when billionaire Elon Musk started to talk about Dogecoin and revealed publicly that he is a big fan.

Elon Musk’s love for the dog-themed coin inspired dozens of other meme coins to be created. Shiba Inu is by far the most popular one. It even surpassed Dogecoin in the marker cap at its peak. Other meme coins are typically in the place 100 to 1000 in crypto rankings.

The table below shows the five biggest meme coins at the time of writing this article.

CoinTickerMarket cap
Dogecoin DOGE $11 billion
Shiba Inu SHIB $6 billion
Baby Doge BABYDOGE $340 million
Floki Inu FLOKI $280 million
Bone ShibaSwap BONE $250

The popularity of meme coins can be attributed to various factors, including their low unit prices, humorous branding, and accessibility to retail investors. Many investors are drawn to these coins to participate in the cryptocurrency market without having to invest large sums of money.

The low unit price is a significant factor. The price of meme coins is usually set so low that you can get millions of tokens with a $10 investment. This gives the illusion that there are major gains to be had if the price just moves a tiny bit higher.

Meme coins are also highly volatile and can experience significant price swings in short periods of time. This is partly due to their lack of intrinsic value and reliance on social media hype to drive demand. In addition, the liquidity of meme coins can be limited, which can exacerbate price movements.

Despite the risks associated with investing in meme coins, they continue to attract a large following and generate significant media attention.

Dogecoin and Shiba Inu are the most popular meme coins

Dogecoin and Shiba Inu are the most popular meme coins. Next, we’ll dive deeper into both coins.

Dogecoin

Dogecoin was created in 2013 by two software engineers, Billy Markus and Jackson Palmer, as a joke based on the popular “Doge” internet meme. Despite its origins as a humorous project, Dogecoin quickly gained a following on social media and online forums, with users tipping each other small amounts of the coin as a form of appreciation.

Over time, Dogecoin’s popularity grew, and it began to gain wider acceptance as a form of payment. The community also became known for its charitable initiatives, raising funds for causes such as the Jamaican bobsled team and clean water projects in developing countries.

In 2021, Dogecoin experienced a surge in popularity and price, fueled in part by endorsements from high-profile figures such as Elon Musk. Musk even made some of the Tesla merchandise available for Dogecoin purchases.

Dogecoin is forked from a cryptocurrency called Luckycoin. Luckycoin is very similar to Litecoin, which in turn, shares a lot of similarities with Bitcoin. You could say Dogecoin is a cousin of Bitcoin.

Dogecoin is a mineable cryptocurrency, and it is merged with Litecoin using the Auxiliriaty Proof of Work (AuxPow) technology. The block time of Dogecoin is one minute. There are 10,000 dogecoins created in each block.  Read more about Dogecoin from our in-depth guide.

Shiba Inu

Shiba Inu is a cryptocurrency that was created in August 2020 by an anonymous individual known as Ryoshi. The coin is based on the popular Shiba Inu dog meme and has gained a significant following on social media and online forums.

The popularity of Shiba Inu can be attributed to several factors, including its low unit price, meme-based branding, and the widespread interest in cryptocurrency among retail investors after its launch. In addition, the Shiba Inu community has been active in promoting the coin and building a strong following, with initiatives such as the “Shib Army” and “Shibswap” platforms.

shib

Shiba Inu is also related to Vitalik Buterin, the co-founder of Ethereum, in a unique way. In May 2021, the creators of Shiba Inu sent half of the total supply of the coin, which was worth billions of dollars, to a wallet address associated with Buterin as a “burn” gesture. The idea behind the burn was to reduce the overall supply of Shiba Inu and increase its value.

Buterin decided to burn (destroy) about 90% of the SHIB token, worth $6.7 billion at the time.

Shibarium is a new project that aims to build a decentralized exchange (DEX) for Shiba Inu and other meme-based cryptocurrencies. The platform will be based on the Ethereum blockchain, enabling users to trade cryptocurrencies without relying on centralized exchanges.

The launch of Shibarium has been eagerly anticipated by the Shiba Inu community, as it is expected to provide a new avenue for trading and liquidity for the coin. However, the project is still in development and faces several challenges, including the need to attract liquidity providers and ensure the security of the platform.

Shiba Inu (SHIB) is technically an Ethereum ERC-20 standard token. It means that Shiba Inu is circulating on the Ethereum platform, and you need ETH for paying each transaction. Shiba Inu doesn’t have its own blockchain like Dogecoin, which makes it less usable for payments.

Investing in meme coins

Investing in meme coins, such as Dogecoin or Shiba Inu, can have both positive and negative aspects. On the positive side, meme coins have the potential to introduce a new demographic of investors to the world of cryptocurrency, who may have previously been intimidated by more complex assets.

These coins often have low barriers to entry, with affordable prices and accessible trading platforms, which can make investing more accessible to a wider audience. Millions of people have made their first crypto purchases and crypto transactions using meme coins.

In addition, meme coins can be highly volatile, which means that there is the potential for high returns in a short period of time. This can be attractive to investors who are looking for opportunities to make quick profits.

memes investing

However, investing in meme coins also comes with significant risks. Meme coins do not have any intrinsic value and are based solely on popularity, which can be fleeting. This means that their price can fluctuate significantly in a short period of time, and investors may suffer significant losses if the market turns against them.

Furthermore, the lack of regulation and oversight in the meme coin market means that there is a higher risk of fraud and scams. Investors should be cautious when investing in meme coins and should conduct thorough research before making any investment decisions.

Meme coins should be treated as the name suggests. They are memes, and memes are all about having fun. The communities can also bring lots of people together and help newcomers learn about other cryptos as well. Don’t’ make big investments on meme coins expecting long-term profits.

It’s also good to remember that big gains are made when meme coins are bought during quiet periods. People who rush into memes at the peak of the bubble are the so-called exit liquidity. You can only make significant gains by investing in meme coins before they become hot.

The future of meme coins

The future of meme coins is uncertain, but it is likely that new meme cycles and themes will emerge. As we have seen with the rise of Dogecoin, Shiba Inu, and other meme coins, they have the potential to generate significant interest.

It is possible that future meme coins could be animal-themed, as animal memes have proven to be particularly popular in online communities. We have had dog-themed coins, so maybe the next boom will be about cats?

In 2023, we have seen coins such as PEPE and WOJAK make significant gains. These are based on the popular Pepe the frog and Wojak memes.

Alternatively, new themes or concepts could emerge, driven by cultural trends or current events. The success of future meme coins will depend on a variety of factors, including the strength of the underlying community, the quality of the development team, and the potential use cases for the coin.

Meme coins have captured the attention of many investors and are likely to continue to generate interest in the cryptocurrency space. Not least because Elon Musk is a fan of Dogecoin, and he’ll certainly keep tweeting about the king of memes.

Memes are powerful and here to say. Just remember that such coins are not investments but high-risk bets on very volatile assets. Bets on such coins should be very small. We recommend meme coin investing only for crypto veterans, who understand the risks.

Antti Hyppänen

Antti Hyppänen is the founder and editor-in-chief of AboutBitcoin.io. Antti has written articles about cryptos since 2017. He follows the crypto market every day of the year and is responsible for the daily operations of AboutBitcoin. Antti is not a maximalist regarding any cryptocurrency but looks at the industry objectively. Antti’s investment profile is “buy & hold,” i.e., he does not trade or use leverage. His crypto portfolio consists of mainly Bitcoin and Ethereum. Antti also follows macroeconomic events. In addition to cryptos, his interests include gold, silver, and the US stock market.