The Unpleasant Truth of Overhyped Crypto Reality
The craze for meme coins is sweeping through the crypto world, with investors pouring millions into these digital currencies. For instance, in 2021, Dogecoin’s value surged by over 12,000%, catching the eye of both experienced traders and beginners. Despite not having real value or practical uses, meme coins are gaining popularity due to social media buzz and celebrity endorsements. This hype has caused their prices to skyrocket, attracting more investors hoping to make quick profits.
However, this trend comes at a cost. Many investors are choosing to invest their funds in meme coins rather than more fundamentally sound projects with real-world applications. As of 2023, the investment ratio in meme coins compared to potential blockchain projects was reported to be nearly 3:1. This disproportionate investment highlights a burning issue within the crypto community, where people are more focused on quick profits rather than on the long-term potential of important new technologies.
What Is Meme Coin?
A meme coin is a type of cryptocurrency inspired by internet jokes or memes. Unlike regular cryptocurrencies, meme coins usually don’t have a serious purpose or strong technology behind them. They become popular due to Social Media Hype, Community Engagement, and the Viral Nature of memes. For example, Dogecoin, one of the most famous meme coins, was created as a joke based on the “Doge” meme featuring a Shiba Inu dog. Despite starting as a joke, Dogecoin became very popular and reached a market value of over $80 billion at its peak in 2021.
Meme coins generally have a Large Supply and Low Value Per Coin, making them attractive to small investors hoping for exponential returns. Shiba Inu, another popular meme coin, saw a price surge of over 1,000,000% in 2021, driven by speculative trading and a Strong Online Community. Other examples of meme coins include Pepe Coin, Bonk, and Floki Inu, all of which have experienced similar patterns of rapid growth fueled by internet culture.
How and When Did Meme Coins Go Viral in the Crypto Market?
Meme coins became very popular in the crypto market around 2020, with Dogecoin leading the way. Created in 2013, Dogecoin was not well-known until it caught the Attention of High-Profile Figures like Elon Musk. His tweets and public support caused a lot of excitement. By early 2021, Dogecoin’s value had skyrocketed, giving returns of up to 12,000% in just a few months.
The virality of meme coins can be symbolized by their strong social media presence and the power of online communities. Platforms like Reddit, Twitter, and TikTok helped promote these coins, encouraging people to buy and hold them. This led to huge returns, with some investors seeing gains of 500x to 10,000x or even more. For example, Shiba Inu, launched in August 2020, saw its value skyrocket, giving a return of over 1,000,000% by October 2021. This trend was further fueled by the overall bullish sentiment in the crypto market during that period.
Unrealistic Return of Top 5 Meme Coins
1. Dogecoin (DOGE)
Dogecoin, initially a joke, turned into a massive investment opportunity. From its inception in 2013, the price of a Dogecoin was $0.0002 per coin. After that, DOGE saw a price surge from fractions of a cent to an all-time high of $0.74 in May 2021, providing early investors with returns exceeding 10,000%.
2. Shiba Inu (SHIB)
Launched in August 2020, Shiba Inu quickly gained popularity as the “Dogecoin Killer.” Its price skyrocketed from $0.00000001 to $0.00008845 in October 2021, resulting in a staggering ROI of over 7,000,000%, which was unexpected in the market.
3. Pepe Coin (PEPE)
Pepe Coin, based on the popular internet meme character Pepe the Frog, also experienced dramatic price increases. Although its market presence is less prominent, it still saw returns of over 500% within months of its launch. The listing price of this coin was only $0.0000002 per coin and the ATH (All Time High) price was $0.00001.
4. Bonk (BONK)
Bonk is another meme coin that captured investor interest. Though relatively new, Bonk experienced rapid price appreciation, providing early investors with substantial returns, sometimes exceeding 1000% in short periods. The initial price of BONK was $0.0000003. Then it surged over $0.00003 per coin.
5. Floki Inu (FLOKI)
Floki Inu, named after Elon Musk’s Pet Dog, saw a significant price surge following its launch. It achieved a price increase of over 2500% within a few months, drawing in many speculative investors.
Does It Really Worth Investing in Meme Coins?
As we saw, Investing in meme coins can be tempting because they offer the chance for quick, huge profits. However, the practicality and long-term value of these investments are Highly Questionable. Unlike projects that focus on real-world uses like Decentralized Finance (DeFi), Supply Chain Management, or Digital Identity Verification, meme coins usually don’t have real utility or purpose.
One big problem with meme coins is that they don’t have a real purpose. Their value mainly comes from hype on social media and endorsements from celebrities. For example, Dogecoin’s rise in 2021 was mostly due to tweets from Elon Musk, not because of any real-world uses or new technology. This makes meme coins very unstable and likely to have sudden price drops.
Furthermore, The hype around meme coins takes money away from important blockchain projects. By 2023, less than 1% of meme coins had any real use. This is very different from projects like Ethereum, which supports smart contracts and decentralized apps (dApps), or Chainlink, which provides essential data for smart contracts. These projects offer real benefits and have the potential to change many industries.
Despite the occasional success stories of investors making substantial profits, many also face significant losses. The Lack of Regulation and Transparency in the meme coin market increases the risk of scams and rug pulls, where developers abandon a project after raising substantial funds. This unpredictability, highlights the need for careful research and caution when investing in meme coins..
Final Judgment
On our final thoughts, the huge popularity of meme coins shows how speculative the crypto market has become. Even though meme coins can offer big returns, they often take attention away from more promising projects with real-world uses. Investors should be careful and think about the long-term potential of their investments. They should focus on projects with real benefits and sustainable growth. The temptation of quick profits should not replace the need for smart and informed investment decisions.
Author : Mr.OxBull
Article Published : 18th May, 2024