The value of cryptocurrencies can be difficult to determine. However, it becomes even more complicated when trying to assess the worth of meme-coins. What started as a joke has led to life-changing profits (and losses) for many investors.
This cycle, we now speak of a meme coin super-cycle. This refers to a significant pattern where meme coins are not performing well alone but dominating the crypto market in returns.
Unlike before trends where all crypto assets generally rose together, this cycle shows a distinct preference for meme coins over others. So what exactly are memecoins? Let’s discuss.
Table of Contents
What are Meme Coins?
We talk about a meme coin when a digital currency is driven by or based around internet memes. In other words, a coin that is supported and promoted by images or videos massively shared on social media.
The difference between a meme coin and a “regular” coin lies in the utility of the coin. While Bitcoin and Ethereum were built with specific goals in mind, a meme coin has little utility.
Originally, a meme was defined as a unit of culture, which could manifest in various forms such as language, games, or songs. This broad definition encompasses much more than just the visual memes that dominate internet culture today.
The most well-known example is Dogecoin, which started as a parody of Bitcoin but has since become a staple in the top cryptocurrencies by market cap and has consistently appeared in the top 50 altcoins since as early as 2012.
Memecoins Are a Reaction on…
Overproduction of Tokens
The crypto space is currently experiencing an overproduction of tokens, with about 600,000 new tokens launched in 2024 alone. A saturation that dilutes the value of many new altcoins, making standout tokens such as meme coins more appealing for investors looking for novelty in this proliferated space.
Speculation for Everyone
Most of the altcoin market appreciation occurs in private rounds, often leaving little room for growth post-listing, because VCs are dumping on retail. A scenario that has made meme coins, which are generally more accessible to anyone and not tied to private investment rounds, more than appealing. Everyone can become rich, if you are just early enough.
Inflated Altcoin Valuations at Launch
Many altcoins are introduced to the market at high valuations which often do not sustain, and often lead to significant losses post-launch. A pattern that discourages investments in new, high-valued altcoins while meme coins, typically starting at low valuations, become more attractive.
On the flip side, the best crypto products often don’t need a token, and the most successful tokens frequently don’t require a product. A paradox that highlights how meme coins operate differently from other crypto assets.
What Are Celebrity Coins?
Celebrity coins are digital assets endorsed or associated with celebrities, bringing attention and their fanbase to the crypto market. However, the scene has been mixed, with notable successes and more than many failures. We could say there are hit-and-run cases. If you are early, get out on time; if you are late, you are more than likely rekt.
Often, the teams behind celebrity coins may not align with the long-term value of the coin. Nonetheless, when used responsibly, the influence and social capital of celebrities can drive attention towards these kinds of ‘meme coins’.
How do I Invest in Meme Coins?
Investing in meme coins works the same way as investing in any other cryptocurrency. You will first need to register on an exchange or download an app that lets you easily trade them. To trade the big meme coins, one will have to go to major exchanges.
How Important Is the Choice of Blockchain for Meme Coins?
The blockchain platform on which a meme coin is launched can significantly impact its performance. Platforms like Solana have been used most for their ability to support high transaction volumes with lower fees.
A highly successful meme coin launch can bring increased traffic and visibility to a blockchain like Solana, which in turn can attract more developers and projects to the platform.
Platforms like Pump.fun have revolutionized the creation of meme coins by significantly lowering the barriers to entry. Anyone can make one. Initially, the production of meme coins was moderate, with around 20 new coins appearing daily. However, this number has skyrocketed to 10,000 daily.
What Makes Meme Coins More Exciting Than Sports Betting or Casinos?
Meme coins offer better odds and more excitement compared to sports betting or casinos. They embody extreme volatility, which is thrilling for anyone seeking their thrills and potential rewards. Unlike traditional gambling, meme coins provide a fresh narrative that allows retail investors a real chance to profit.
What Attracts Gen Z to Meme Coins?
Gen Z, known for being internet-savvy and social media enthusiasts, find meme coins particularly appealing. This demographic is highly active online and quick to spot viral trends. They also don’t have much money to begin with and don’t want to waste money on high fees to get into the fun.
Read Our Detailed Reports on Memecoin Crypto Projects
What Future Predictions Exist for Meme Coins?
There are some bold predictions that one or two meme coins could surpass the all-time high market cap of Dogecoin, which peaked at around $95 billion. But some predictions are also being made on this memecoin supercycle…
- The meme coin market cap is predicted to reach one trillion dollars.
- Two meme coins are expected to each achieve a market cap over $100 billion.
- At least ten meme coins could surpass a market cap of $10 billion.
- Meme coins might represent a quarter of the top listings on cryptocurrency market indices.
- Meme coins could achieve a 10% dominance in the overall cryptocurrency market. Instead of Bitcoin dominance, future generations will speak of meme coin dominance.
The Risk of Meme Coins?
Meme coins are created for laughs and thus have little financial use in the “real” world. Therefore, there are numerous risks associated with this area of cryptocurrency, something you should definitely consider as a speculator.
Often, the teams behind celebrity coins may not align with the long-term value of the coin. Nonetheless, when used responsibly, the influence and social capital of celebrities can drive attention towards these kinds of ‘meme coins’.
- Extreme volatility: We often recognize the pump-and-dump characteristics with meme-coins. The price can drop or rise many percent(s) in short-lived periods. It is vital to keep a close eye on the price.
- High risk: With meme-coins, trend reversals are sudden and brutal. Especially when trading meme-coins on derivative markets, it is possible to suffer heavy losses. Therefore, always be careful and certainly do not bet more than you can lose.
- Rug pulls: The danger of huge dumps or devastating pullbacks always exists. This is because some meme coins are only traded on decentralized exchanges where there is no regulation.
One speaks of a rug pull when the developers of the coin sell/dump large quantities simultaneously, causing the price to collapse. Even experienced investors fall victim to rug pulls. - Communities: Communities determine the popularity of meme-coins. However, if the community that makes the coin popular falls apart, the meme-coin will undoubtedly follow the same fate as that of its community. Also, meme coins are sometimes backed by fake communities that consist only of bots.
- It’s all so tiresome: Because events on the internet drive meme-coins, it can sometimes be tiring to keep up with the never-ending flow of news.
That being said, meme coins are super volatile and speculative, which allows investors who are familiar with the extreme market conditions to capitalize on trading these coins.
Nevertheless, the potential of meme coins is limited because it focuses more on the underlying humor than on financial value.
One should not forget that blindly trusting crypto memes or influencers touting (meme) coins is the fastest way to the food bank. Therefore, it is essential to ALWAYS do your research before making investment decisions.
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