Memes have become a regular part of our online culture, and eventually entered the world of crypto in the form of tradeable digital assets know as memecoins. These fun tokens, based on well-known internet memes, have been creating quite a stir in the crypto market because of their dramatic price changes and exciting beginnings.
Read on to explore more about these extraordinary crypto assets.
TL:DR
Cryptocurrencies based on internet memes and jokes are known as memecoins
They typically have no value or utility and are primarily for entertainment
They have certain attributes that are comparable to Bitcoin and Tether
Their prices can skyrocket, but they're also prone to sharp declines
Traders should exercise caution when dealing with memecoins because of their instability
Understanding memecoins
Memecoins are digital currencies that draw inspiration from trending internet memes or jokes. They often adopt the names and symbols of these memes. For instance, Dogecoin, the most prominent memecoin with a market cap of $9.38 billion as of November 2023, was launched in 2013.
It humorously acknowledged the speculative nature of early cryptocurrencies and was inspired by the 'doge' meme, featuring the Shiba Inu dog. Another popular memecoin, PEPE coin, pays tribute to the Pepe the Frog meme, which has existed since 2005. Driven by social media buzz and hype, memecoins are seen as fun alternatives to more serious cryptocurrencies. They typically lack intrinsic value and utility.
The technical aspect of memecoins
While memecoins might seem whimsical, their technical foundation is solid. They often utilize blockchain technology, similar to established coins like Bitcoin. Many also incorporate smart contracts from platforms like Solana and Ethereum. For instance, Dogecoin initially used Litecoin's infrastructure before transitioning to Bitcoin's. A notable distinction is that memecoins might have an unlimited or vast supply, leading to lower unit prices.
Why the hype around memecoins?
Several reasons drive people to trade memecoins:
Entertainment and novelty
A sense of community around the coin
Fear of missing out on potential price rises
Portfolio diversification
Despite their playful nature, some memecoins have yielded significant returns for traders who've strategically timed their trades.
Which memecoins are popular?
Due to the high level of fluctuation, this is a difficult question to answer. Nevertheless, the following memecoins are particularly noteworthy.
WSM
This memecoin seeks to use humorous memes to poke fun at Wall Street and the traditional financial system. As of the time of writing, WSM market cap sits at over $40 million.
PEPE
Kermit the frog with his cup of tea has been knocked off his meme throne thanks to the internet's favorite frog, Pepe. As of writing, the PEPE coin market cap is $464.84 million.
Shiba Inu (SHIB)
Did you know, upon receiving half of the SHIB coin distribution, Vitalik Buterin destroyed a considerable amount of it and gave another large chunk to the India Covid Relief Fund. As of November 2023, SHIB's market cap sits at $4.51 million.
DOGE
It's no secret that DOGE is one of Elon Musk's favorite memecoins. So much so, before Twitter rebranded as X, the DOGECOIN logo replaced Larry the Bird. As we mentioned earlier, DOGE's market cap stands at $9.38 billion at the time of writing.
MEME
As the latest meme token to make waves in the memecoin space, Memecoin has zipped up the market cap rankings to reach a total of $1.74 million. Thanks to its ties to Memeland, the Web3 venture studio of 9GAG fame, MEME has attracted both crypto beginners and veterans as they go down the Memeland ecosystem rabbit hole.
Trading Memecoins
Like other cryptocurrencies, memecoins can be traded on various exchanges. Platforms like OKX list popular memecoins such as DOGE, SHIB, PEPE, WSM, and MEME, allowing traders to diversify their portfolios. However, given their inherent volatility, traders must research and understand the risks before trading memecoins.
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