What Are Meme Cryptocurrencies and Should You Buy Them?

Memecoins are known for their extreme volatility, which can result in rapid and substantial gains. Their low prices make them accessible to a broad audience, allowing people to buy large quantities with relatively small investments — at least until a memecoin takes off in value. Dogecoin, the original memecoin, is a peer-to-peer, open-source cryptocurrency created in 2013 by software engineers Billy Markus and Jackson Palmer.

Why Whales Are Betting Big on This New Solana Meme Coin With 9,000% Growth Potential Over SOL and SUI

Surprisingly, the general best practices of meme coin investing aren’t very different from those recommended for alternative investing in general. If a coin has anything related to “DOGE” or “SHIBA” in the name, it’s probably a meme coin. One good place to figure out whether something is a meme coin or not is through the project’s website. If the creators spend very little space talking about potential uses for the currency and their page has numerous references to Elon Musk and cute animals, then it’s likely a meme coin. Cryptocurrencies aren’t the only financial instruments to turn into viral internet sensations.

How Do Meme Coins Work?

In the United Kingdom, crypto assets are classified coding resources for beginners as restricted mass market investments. This classification means that such assets are considered high-risk investments and are not suitable for retail investors. Meme coins break through the noise and invite individuals to share a laugh together.

• However, while meme coins can be risky, they are not inherently unsafe if approached with the right mindset and risk management strategies.
• Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only.
• Dogecoin was a great investment for a very short time — and that time has completely passed.
• Meme coins like Dogecoin (DOGE) and Shibu Inu coin (SHIB) are among the most well-known so-called altcoins in crypto.
• Meme coins can generally be purchased from crypto brokers or exchanges that offer the respective coins and tokens.
• Some meme coins have useful functionality, like DOGE and SHIBA, and have primarily used the “meme” aspect to increase adoption.

There are also non-fungible tokens, often called “NFTs.” These are individual assets on the blockchain that can be bought and sold between users, such as art or images. While online arguments continue to happen regarding the legitimacy of NFTs, many people have taken advantage of the massive craze to sell iconic memes as NFTs. This includes the original files of some of the world’s most recognizable internet figures, such as Disaster Girl and Nyan Cat. Meme coins like Dogecoin (DOGE) and Shibu Inu coin (SHIB) are among the most well-known so-called altcoins in crypto.

Check the transparency and audit status of meme coin projects

Although often considered a fun token, the project also has serious applications and is supported by a dedicated community advocating for decentralised and creative financial solutions. Meme coins are a direct result of the rapid development and popularity of cryptocurrencies and the increasingly strong meme culture on the internet. They initially emerged as fun projects that used the virality of internet memes to attract attention and create a community.

Manage your risks

Dogecoin was a great investment for a very short time — and that time has completely passed. The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice. Shiba Inu, for example, can be traded at Binance, Crypto.com and KuCoin, as well as decentralized exchanges (DEXs) such as Uniswap. The author held no positions in the aforementioned investments at the time of publication.

Meme Coins: Definition & Characteristics

It can help compare an actual white paper (like Ethereum’s) to a beginners’ guide to bitcoin 2021 a meme coin’s (like Bonk Coin). Find the project’s development pages (such as on GitHub), and read some of the discussions. Also, read over any social media postings—like Reddit or X—there will be people and groups discussing the coins you’re looking at. Yet it’s not just fair-weather trend followers who are known for being bullish on meme coins. Yes, Simmons played into the dogecoin hype, but he also famously invested $300,000 in ADA in February 2021. Simmons has expressed general praise of Cardano founder Charles Hoskinson.

Shiba Inu (SHIB), a crypto token inspired by Dogecoin, is the second largest meme coin by market cap. Shiba Inu was created by an anonymous developer named Ryoshi, and released in August 2020. Using the same breed of dog (the Shiba Inu) as its logo, Shiba Inu’s developers aimed to create a meme coin that would be an alternative to DOGE. Dogecoin runs on its own blockchain network and uses a proof-of-work consensus algorithm that allows cryptocurrency miners to validate transactions.

Giants like Bitcoin are not immune to this volatility-boosting effect, but meme coins like Dogecoin are always exposed to these unpredictable winds of change. Some go beyond simple jokes and prove to be outright scams in the long run. Meme coins also serve as an entry point into the cryptocurrency how to buy ada on bittrex world for many investors.

Additionally, analyse the coin’s liquidity, trading volume, and market capitalisation. Legitimate projects generally have adequate liquidity to support trading and avoid dramatic price fluctuations. Watch for unusual trading patterns or sudden spikes in price, which could suggest a pump and dump scheme. Determining the legitimacy of a meme coin requires careful evaluation and due diligence — what the crypto space calls DYOR, short for ‘do your own research’.