What is meme coin? Joke or life-changing investment opportunity?

1. What is meme coin?

Currently, although there is no official definition of Meme coin, this term is often used to refer to electronic currencies inspired by funny images, events, or content. popular on the internet. Unlike currencies created from complex algorithms and rules such as Bitcoin, Ethereum, Meme coins are often created for entertainment purposes and do not carry any technical value or solve any problems in the blockchain market.

2. How did meme coin create an investment fever?

Dogecoin is one of the first Meme coins developed with the symbol of a Shiba dog, which appeared in many memes on social networks in the 2010s. 2021 can be considered one of the "booming" years. ” of the Meme coins, Dogecoin and Shiba Inu are leading the meme coin niche, attracting the attention of many investors and skyrocketing in price and market capitalization. As of November 2021, DOGE has increased over 8,000% since the beginning of the year and is ranked 9th by market capitalization on CoinMarketCap. Meanwhile, Shiba Inu has grown more than 60,000,000% since January 2021.

Elon Musk, one of the most influential figures in the cryptocurrency market, posted a post on Twitter in July 2020, helping Dogecoin increase in price and stimulating the development of follow-on cryptocurrencies, named after related dog breeds such as Shiba, Floki, Akita, Husky and many others. Shiba Inu was released in August 2020 and caused a shock when transferring half of one million billion coins (worth 7 billion USD) to the founder of the Ethereum network.

*How did meme coin create an investment fever?*

3. Why does Memecoin attract many investors?

Myths about “looks cheap” prices

Instead of having to spend up to $28K to own 1 BTC, with Meme coin, you only need to spend $1 and you can own thousands or even hundreds of thousands of tokens. Meme coins often have extremely low prices, with "a lot of zeros behind the commas" causing many people to mistakenly think the coin price "seems cheap" without even realizing the project's capitalization is too high compared to market.

This reason comes from the fact that Meme coin is a cryptocurrency with a huge or infinite token supply. For example, the Shiba Inu coin (SHIB) has a total token supply of 1 quadrillion tokens, whereas, DOGE has no maximum supply and already has over 100 billion tokens in circulation. However, because Meme coins usually do not have a token burning mechanism, the huge supply of tokens keeps their prices relatively low.

Increase prices regardless of the market

Currently, there are more than 300 Meme coin projects on the market, with most named after animals such as dogs or cats. Meme coins attract the attention of many investors largely due to the sudden increase in price just because of a quote from a famous person, such as Elon Musk or Mark Cuban, when they shared about various types of Meme coins. on social networks. Their tweets or posts can make a huge impact on the value of that Meme coin.

A typical example is Dogecoin, one of the most famous Meme coins in the cryptocurrency community. It was initially created in 2013 by Jackson Palmer and Billy Markus as a joke but quickly attracted community interest. In 2021, Dogecoin officially became the focus of attention when billionaire Elon Musk frequently mentioned it on Twitter and in public statements. This brought Dogecoin to its peak with a market capitalization of up to 90 billion USD and once ranked in the top 5 capitalization rankings.

4. What are the risks when investing in Meme coin?

Meme coin can promise to bring huge profits to investors in a short time, but at the same time there are many potential risks. Meme coin projects often lack transparency and reliability, making it possible for investors to be scammed or lose money because the projects have no real value. Additionally, memecoins often focus on the potential for rapid price increases instead of long-term vision and sustainable development, leading to the risk of devaluation and sudden collapse.

Furthermore, as mentioned, only a small number of Meme coin projects are developed further and have practical applications. For example, Dogecoin is used to pay for some services; Shiba Inu releases NFTs and several new tokens in the ecosystem; Rici releases NFT game using Rici coin, applies VR to the game,...

However, there are not many Meme coins like that. With the explosion of the Meme coin market, choosing a suitable and reliable project becomes even more difficult. In addition, Meme coin can also be easily manipulated by some individuals or large organizations, causing sudden and unfavorable price fluctuations for investors.

5. Meme coins are gaining attention in the market

Currently, there are many Meme coins that are attracting the attention of investors and users in the cryptocurrency community. Below are some Meme coins that are of interest in the market:

Dogecoin (DOGE): This is the most known Meme coin on the market, created in 2013. Dogecoin was initially born as a joke, but later became a cryptocurrency. Popularization with large price and capitalization.
Shiba Inu (SHIB): This is a new cryptocurrency released in 2020. Shiba Inu is developed based on the Ethereum platform and is considered a Chinese version of Dogecoin.
SafeMoon (SAFEMOON): This is a new cryptocurrency released in 2021. SafeMoon is considered a safe and secure cryptocurrency, developed based on the Binance Smart Chain platform.
Akita Inu (AKITA): This is a new cryptocurrency launched in 2021, also developed based on the Ethereum platform. Akita Inu is considered a Japanese version of Shiba Inu and Dogecoin.
Pepe Coin (PEPE): Is a Meme coin built on the Ethereum blockchain (ERC-20) and launched in 2023. This coin is named after the image of Pepe the Frog, a popular Internet symbol used in the meme community. With the token deflation mechanism and community-focused model, Pepe Coin is attracting special attention from investors and becoming an emerging Meme coin with the ambition to replace Dogecoin and Shina Inu.

6. Conclusion

Investing in Meme coin is a risky decision and is not recommended for investors without experience and knowledge of the cryptocurrency market. Although Meme coins can suddenly increase in price, they can also drop sharply in price afterward and have no real business or value behind it. In addition, the Meme coin market is growing rapidly and there are many fraudulent and unreliable projects, so investors need to be careful and evaluate carefully before making investment decisions.

If you decide to invest in Meme coin, consider the risks and only invest the amount you can afford to lose. You should research carefully about the project, developer, potential and growth opportunities before making a decision. Furthermore, you should always update information and closely monitor the market to adjust your investment decisions when necessary.

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