One thing the crypto has is endless variety. At any time, there are tens of thousands of tokens floating about and more are launched every day. One of the more interesting types of tokens is meme coins. These coins are at the forefront of the online culture that has driven crypto for years and are also one of the most controversial types of tokens.
Some see them as nothing but jokes to be dismissed and others argue that they are as legitimate as any other type of crypto. In this article, we look into meme coins and their potential.
What are Meme Coins?
First things first, you should be aware of what exactly meme coins are. Meme coins are crypto assets that are based on internet memes and popular lore. Cryptos can have several different purposes and backgrounds, such as utility tokens, stablecoins, and much more.
Meme coins, on the other hand, are based on and serve as a digital reference to memes and other such entertainment material. A meme is essentially a piece of media (usually a humorous picture or video) that has gained widespread popularity online. Think of the dog giving the viewer a side or the blinking man or the girl smiling at a burning building. These pictures, gifs, videos, and much more have gained a life of their own online.
In the 2010s, as cryptos became more popular, it was apparent that digital assets could be made and named anything. You also need to keep in mind that the crypto space was powered by online culture. After all, cryptos are digital assets and so, they thrived thanks to a digital community that engaged on social media and, yes, shared memes.
Soon, we began seeing cryptos being launched that were named after recognizable memes. Arguably the first was Dogecoin, which is based on the popular meme of a Shiba Inu dog. Dogecoin was founded in 2013 and led to a flurry of other memes popping up. But that wasn’t to say that they were an instant hit. In fact, many within the crypto space ridiculed them.
The idea of cryptocurrency was to take on the mainstream financial world and how would it do this if it was being named after internet jokes? But by 2021, Dogecoin shot to the top of the crypto scene when it got a ton of attention from Elon Musk, who even name-dropped the token during an SNL appearance. Since then, Dogecoin has landed in the top ten tokens by market cap and many other meme coins have emerged in its wake.
Are Meme Coins a Good investment?
Now that you have an idea of what meme coins are and how they have evolved, you might be wondering whether or not they are worthwhile investments. After all, can tokens based on internet jokes be a worthy avenue to spend your money on?
The truth is that meme coins can be good or bad investments depending on the token. Sure, it is odd to have a token that bears the same name as popular slang or pop culture characters in your portfolio, but some have gone on to deliver good returns. Here are a few things to consider before investing in a meme coin:
- Use Cases
The first thing that might make a meme coin a good or bad investment is its possible use cases. While there are thousands of meme coins in the market, the ones that rise to the top are typically those that have tangible use cases. As Ben Beddow writes, one of the factors in the Shiba Inu price prediction is improvements that have been made to its ecosystem, making the blockchain more attractive for use among consumers.
The demand for this blockchain also means that there will be demand for the token, driving up its price. Domestic use of the token is also something to consider. Tokens like Solana see a price boost from being used in casinos, to pay for goods and services, and much more. When considering any meme coin, ask yourself what its use cases are.
- Timing
Because they are based on memes, timing is a big factor in whether or not you can make money investing in meme coins. Some of these tokens are tied to specific events and developments and so they have a certain window of profitability. For example, meme coins relating to Queen Elizabeth II of England went up in value around the time of her death and this was beneficial for investors.
Similarly, if a particular meme or personality is going viral, then would be a good time to profit from it. Ideally, a meme coin should have more tangible value outside of the jokes but this is also something to consider.
- Lore
Another factor that could make a meme coin valuable is the lore behind it. We’ve discussed how some meme coins are valuable because they are attached to a trending topic but there are also tokens that are attached to evergreen lore.
Several meme coins have been launched based on the show South Park, for example. These types of tokens can see price shifts not only upon release but also as the show itself rises and falls in popularity. Meme tokens attached to charismatic figures can also remain profitable for a long time. So, if you’re looking for meme coins to invest in, those with a strong lore might be a good idea.
- Team
Just like with any other crypto, you might want to look into the team behind whatever meme coin you’re considering. Is the team made up of experienced developers? Have they been involved in any other successful crypto projects? All these should give you an idea of how valuable the project will be.
It can also help you avoid scam meme coins, which are an unfortunate reality of the industry. By knowing a bit about the background of the token, you can avoid shitcoins trying to take advantage of meme coin hype.