Memecoins

A case study in the power of community and FOMO

Published

8 months ago

6 June, 2024

Ten years ago, two programmers created a “fun and friendly online currency” as a joke to poke fun at the emerging hype around cryptocurrencies. Little did they know that their meme-based “dog” coin would give birth to a new category of cryptocurrencies known as memecoins.

Over 150 memecoins are actively traded today, with estimates suggesting that more than 400 exist. Even though many of them have fallen into oblivion, the market capitalization of memecoins stands at around $18 billion.

Let’s delve into what memecoins are, their value, their role in the current bull cycle, and how the Fear of Missing Out (FOMO) effect drives the success of some memecoins.

What are meme coins?

Memcoins are cryptocurrencies based on popular internet memes. This is a vivid example of a financial asset that has no fundamental value and grows in value only due to the interests of community members.

The first memecoin, Dogecoin (DOGE), appeared thanks to Elon Musk’s favorite meme featuring a Shiba Inu dog. At the end of 2013, Dogecoin was traded on cryptocurrency exchanges at a price of $0.0003-7, in mid-2018 the coin’s exchange rate surpassed $0.01 for the first time, and in May 2021 it briefly reached $0.74. At the time of this writing, DOGE’s market capitalization was approximately $14 billion. This means that the project is worth more than the American technology company Dropbox.

Main characteristics of memecoins

Memcoins have several characteristics that distinguish them from other cryptocurrencies. Here are some of them:

Unique approach. Memcoins usually do not have their own blockchain but are created on the basis of existing platforms, such as Ethereum or Binance Smart Chain. This makes them easier to launch and deploy, but it also means they don’t offer new solutions or technological innovations. Their main value lies in their unique design, name and concept, which attract attention and evoke emotions among users.
High volatility. Memcoins are subject to strong price fluctuations that depend on various factors such as news, tweets, rumors, supply and demand. Their prices can rise or fall by hundreds or thousands of percentage points in a short period of time, making them very risky but also potentially profitable investments. For example, on May 8, 2021, during Elon Musk’s appearance on Saturday Night Live, DOGE’s price dropped 30% after he called it a “hoax.” On October 10, 2021, after Musk posted a photo of his dog Floki Inu, the price of Floki Inu increased by 1000% in just a few hours.
Strong community. Memcoins rely heavily on fans and supporters, who create and maintain their popularity. They actively participate in social media, forums, chat rooms and other platforms where they share memes, information, advice and support. They also organized various promotions, contests, airdrops and charity campaigns to attract new users and strengthen their reputation. For example, in 2014, the Dogecoin community raised over $50,000 to sponsor the Jamaican bobsled team’s participation in the Sochi Olympic Games. In 2021, the Shiba Inu community donated more than $1 billion. to fight Covid-19 in India.
Humor. Memcoins do not claim to be serious and do not set their global goals. These were created for entertainment, jokes and parodies. They often use irony, sarcasm, overestimation or underestimation of their values and potential. They also like to make fun of other cryptocurrencies, especially those considered competitors or antagonists. For example, Shiba Inu calls himself a “Dogecoin killer” and an “experiment in a decentralized spontaneous community.” And Dogelon Mars promises to “conquer the entire galaxy” and “create an interplanetary currency.”
High risk. Memcoins carry significant risks for both investors and developers. Investors risk losing all their funds due to a sharp price drop, hacker attacks, liquidity leaks, smart contract failure, or other unforeseen circumstances. Developers run the risk of facing legal problems, accusations of fraud, criticism or boycotts from the community or regulators. For example, in 2018, Dogecoin creator Jackson Palmer abandoned the project and the cryptocurrency industry as a whole, saying he had “lost faith” in them due to “toxicity, greed and manipulation.” . In 2021, the creator of Shiba Inu, known by the pseudonym Ryoshi, was accused of being the “hidden owner” of the project and receiving undeserved profits from its growth.

As you can see, memcoins have advantages and disadvantages that need to be considered when making investment decisions. In the next part of this article, we will look at four very popular memcoins to date.

The influence of FOMO

FOMO, or fear of missing out, is a psychological phenomenon that plays a significant role in the success of memecoins. As investors witness the meteoric rise of some meme coins, they are gripped by the fear of missing out on potential gains, leading them to invest in these assets and further fuel their growth.

However, the power of FOMO in the cryptocurrency market cannot be understood. When a memecoin begins to gain traction through social media buzz, celebrity endorsements, or viral marketing campaigns, it creates a sense of urgency among investors. The fear of missing out on the next big thing pushes more and more people to invest, creating a self-sustaining cycle of hype and value appreciation.

The scarcity of memecoins, combined with the speculative nature of the cryptocurrency market, intensifies this phenomenon. With an increasing number of investors joining this trend, demand for these assets increases, causing prices to rise and perpetuating the Fear of Missing Out (FOMO) effect.

While FOMO accelerates the initial rise of memecoins, it can also result in asset bubbles and significant market volatility. As more investors succumb to FOMO and get on board, the value of these assets may deviate from their true value, increasing the risk of sudden crashes and financial losses.

The importance of strong community support

While FOMO plays a significant role in the initial success of meme coins, their long-term sustainability often depends on the strength of community support. Meme coin projects that foster a vibrant and engaged community tend to have a higher chance of success as these communities become evangelists for the project, driving adoption and creating a sense of loyalty among investors.

Strong communities can also contribute to the development and evolution of meme coin projects by providing feedback, suggesting improvements, and even contributing to codebases or marketing initiatives. This collaborative approach not only strengthens the project but also fosters a sense of ownership among community members, further solidifying their commitment to the project’s success.

While strong community support can be a boon for memecoin projects, it can also pose risks. In some cases, communities can become echo chambers, amplifying hype and potentially leading to irrational decision-making. Additionally, the decentralized nature of these projects can make it difficult to implement changes or resolve issues in a timely manner.

Case Studies: Dogecoin e Shiba Inu

No discussion of meme coins would be complete without mentioning Dogecoin and Shiba Inu, two of the most prominent examples of community power and FOMO.

Dogemoneta

Dogecoin (DOGE) is by far the most famous and successful member in cryptocurrency history. It was created in 2013 as a joke, a parody of Bitcoin and a cryptocurrency boom. Its logo was an image of a Shiba Inu dog, which became a popular Internet meme. Since then, Dogecoin has grown to become one of the largest cryptocurrencies in terms of market capitalization, reaching the $88 billion mark in May 2021. Its price reached a record high of $0.74 per coin. One of the main factors in the growth of Dogecoin has been its active promotion by Elon Musk, who has often mentioned it in his tweets and interviews with him. Dogecoin also has a large dedicated community that supports its popularity and humor. Dogecoin is used as a medium of exchange and donations on the Internet, as well as a means of financing various charitable sports projects.

Shiba Inu

Shiba Inu (SHIB) is a self-proclaimed memcoin killer of Dogecoin. It launched in August 2020 and uses an image of a Shiba Inu dog as its logo. However, unlike Dogecoin, Shiba Inu has a very large number of coins in circulation: one quadrillion (1015), of which 50% were sent to the wallet of Vitalik Buterin, co-founder of Ethereum. It was designed to create a supply shortage and increase demand for coins. However, in May 2021, Buterin decided to donate around 50 trillion SHIBs (worth over $1 billion) to fight COVID-19 in India, leading to a 50% drop in the coin’s price. Shiba Inu also aims to create its own ecosystem from various tokens, a decentralized exchange (DEX), and non-exchangeable tokens (NFT). Its market capitalization currently stands at approximately $3.6 billion.

Risks and challenges

Investing in members carries significant risk for both investors and developers. Investors risk losing all their funds due to a sharp price drop, hacker attacks, liquidity leaks, smart contract failure, or other unforeseen circumstances. Developers run the risk of facing legal problems, accusations of fraud, criticism or boycotts from the community or regulators. Therefore, before investing in memcoin, you need to consider the following factors.

Do your research on the project, the team and the market conditions.
Evaluate the real value and functionality of members
Be aware of your responsibilities in accordance with the regulations of your jurisdiction.
Diversify your portfolio by investing in different members and projects.
Don’t invest more than you can afford to lose
Don’t give in to panic or greed, always miss stop loss orders when it comes to marginal trading.
Be prepared for possible losses.

Conclusion

Memecoins are a notable and divisive trend in the cryptocurrency world, created for entertainment and parody but also used for transactions and charitable purposes. They offer both potential gains from speculation and the risk of losing your investment completely.

To navigate this volatile market, stay informed through social media and news sources and consider memecoin mentions from influencers. Treat meme coin investing like a form of gambling, risking only what you can afford to lose. It may be wiser for most investors to focus on assets with stronger fundamentals.

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Memecoins

Biden Dropping Out? These Biden Replacement Memecoins Are Rising

Published

7 months ago

3 July, 2024

TokenTrends Staff

Is Biden dropping out? These Biden replacement memecoins are surging

Amid speculation about Joe Biden’s future in the 2024 presidential race, memecoins tied to potential successors like Kamala Harris have surged, in contrast to the volatile trajectories of Biden-inspired “Joe Boden” and “MAGA” coins.

As the United States enters election season, it is becoming clear that both campaigns are using cryptocurrency funds and conversions much more than in previous years.

According to recent relationshipsThere is speculation that Biden is considering his future in the 2024 race, prompting traders at Polymarket to raise the odds of the Democrat exiting to nearly 80% on Wednesday, up from 55% previously.

This sudden increase follows a week of volatility in By Polymarket “Biden Drops Out of the Race?”, which has attracted nearly $10 million in bets. Before last week’s debate with Donald Trump, the odds of the same question were at 20%.

The White House has denied all rumors that Biden is considering withdrawing.

Memecoins

Memecoins associated with Joe Biden and Donald Trump have has undergone significant fluctuations in recent months. But these recent reports about Biden’s health have caused a surge in memecoins for his potential successors.

Joe Boden (EARTH) the currency has had a rather difficult six months. BODEN rose to nearly $0.80 in April before collapsing to its current price of $.035. This is a decline in value of more than 95% from its all-time highs.

The MAGA (BRISCOLA) has experienced similar volatility. It reached an all-time high of $17.37 in June before falling to its current price of $5.35.

Biden’s Replacement Memecoins

Over the past 24 hours, memecoins inspired by political figures who could replace Joe Biden, such as “Kamala Coin” (inspired by Vice President Kamala Harris) and “Buttigieg Bucks” (inspired by Pete Buttigieg), have seen a surge in market value.

Kamala coin (FUCK) increased by more than 110% last day.

According to CoinGecko data, another memecoin, “Gabin Noosum” (NOOSUM), is up 15% over the past 24 hours, and a coin inspired by independent presidential candidate Robert F. Kennedy Jr., the misspelled “Ruburt F Kenidy Jr” (KENIDY), has gained 10% over the same period.

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Memecoins

Solana-Based Meme Coins Surge 8x Than Ethereum Counterparts in 2024

Published

7 months ago

3 July, 2024

TokenTrends Staff

Solana-Based Meme Coins Surge 8x Than Ethereum Counterparts in 2024

Key points

Solana meme coins have seen average returns of 8,469% YTD, far outpacing Ethereum’s 962%.
Political meme tokens have emerged as a $784 million subcategory within the $57.7 billion meme coin market.

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Solana-based meme coins have significantly outperformed their Ethereum-based counterparts, producing an average return of 8,469% compared to 962% for Ethereum meme coins year-to-date. According to the “CMC 2024 H1” report, this contrast highlights a wave of speculative capital flowing into the Solana ecosystem.

Image: CoinMarketCap

The explosive rallies of WIF and BONK on Solana have attracted attention and capital from other chains, fueling a cycle of meme coin upside and further investment. While meme coins exist on multiple blockchains, Solana and Ethereum have dominated in terms of activity and trading volume.

Ethereum meme coins, typically launched in 2023 or earlier, have a more established presence. In contrast, most Solana meme coins entered the market in late 2023 or 2024, capitalizing on the recent surge in interest.

In particular, political meme tokens have emerged as a subcategory, with a total market cap of $784 million out of a $57.7 billion meme coin market. MAGA meme coin (TRUMP) has seen gains of over 5,100% this year, influenced by Trump’s vocal support for cryptocurrencies and acceptance of cryptocurrency donations for his campaign.

Image: CoinMarketCap

As cryptocurrencies become a hot topic in the U.S. elections in November, political meme-based coins will continue to attract speculative interest, CoinMarketCap’s report notes.

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Memecoins

Solana Sets New Records With Its Memecoins

Published

7 months ago

3 July, 2024

TokenTrends Staff

Solana Sets New Records With Its Memecoins

19:18 ▪ 4 minute read ▪ by Mikaia A.

The memecoin world on Solana is buzzing with performances that exceed all expectations. Despite a rocky start, Solana has managed to turn things around and establish itself as a prominent leader in the meme cryptocurrency space, outperforming Ethereum by 800% since the beginning of the year.

Memecoin on Solana: Up 800% vs. Ethereum

Last April, the memecoin flame on Solana it seemed to trembleInvestors, disappointed by the poor performance and the recurring problems of some crypto memes, were starting to lose hope.

Top 10 Solana Cryptocurrency Memes – Source: CoinGecko

However, Solana decided to take the bull by the horns. Blockchain has undertaken a series of measures to address the problem of problematic memecoins and clean up its ecosystem. These efforts quickly paid off.

CoinMarketCap relationships from the first half of 2024 to prove that Solana-based memecoins have outperformed Ethereum by 800%An impressive performance that clearly illustrates Solana’s resilience and innovation.

Memecoins as Dogwifhat (WIF), Bonk (BONK) and Billy (BILLY) contributed to this success. Dogwifhat jumped 12.34% in just 24 hours, becoming the top meme coin on Solana. As for Billy, its market cap has risen 97% to $117 million.

These successes are explained by Solana ability to attract talented developers and create an environment conducive to the growth of memecoins.

Additionally, Solana has quickly adapted to the challenges posed by the meme cryptocurrency market, particularly by improving security and promoting transparency of transactions.

The Growth of Meme Cryptocurrencies on a Growing Blockchain

The growth of meme cryptocurrencies on Solana isn’t limited to a few isolated successes. It reflects a broader trend across the memecoin ecosystem.

With a market share of 9.64%, Solana dominates the industry, leaving Ethereum and other blockchains behind.

This dominance can be attributed to several factors. First, the Solana community commitmentwhich was able to mobilize significant resources to support and promote memecoins.

Secondly, Solana technological innovationwhich offers fast and low-cost transactions, thus attracting many developers and investors.

The successes of Dogwifhat and Billy illustrate this dynamic well. In addition to their impressive performances, these meme cryptocurrencies have benefited from massive community support and celebrity promotion.

For example, Ariana Grande shared a meme highlighting the cryptocurrency Michi, which led to an 18% increase in its value. These initiatives clearly show how Solana has managed to create an attractive and dynamic ecosystem for memecoins.

Finally, celebrity influence and increased capital invested in meme cryptocurrencies have also played a key role. Solana has been able to capitalize on these opportunities to strengthen its market position and attract new investors. Blockchain continues to record growth milestonessolidifying its status as a leader in the memecoin industry.

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Avatar of Mikaia A.

Mikaia A.

The blockchain and crypto revolution is underway! And the day the impacts are felt on the most vulnerable economy in this world, against all hope, I will say that I was there for someone

DISCLAIMER

The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Do your own research before making any investment decisions.

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Memecoins

The Memecoin Wave Inspired by Potential Joe Biden Replacements

Published

7 months ago

3 July, 2024

TokenTrends Staff

The Memecoin Wave Inspired by Potential Joe Biden Replacements

The cryptocurrency world has recently witnessed a curious phenomenon: the rise of memecoins inspired by potential replacements for Joe Biden as the Democratic Party’s presidential candidate. In the last 24 hours, these digital coins have seen surprising growth, while the memecoin “Jeo Boden,” a parody of President Biden, has suffered a significant decline in value, falling by more than 30%.

The Memecoin Phenomenon and Its Connection to Biden

Memecoins are cryptocurrencies created as a joke or to pay homage to famous peopleInternet memes or cultural events. Unlike more traditional cryptocurrencies like Bitcoin or Ethereum, memecoins often have no intrinsic value or advanced technology behind them. Their popularity and value are largely dependent on social trends and current hype.

Memecoins inspired by political figures who could replace Joe Biden have seen exponential growth in the past 24 hours. Coins like “Kamala Coin” (inspired by Vice President Kamala Harris) and “Buttigieg Bucks” (inspired by Transportation Secretary Pete Buttigieg) have seen significant increases in market value.

This growth can be attributed to several factors. First, speculation that Biden may not run for a second term has created a wave of interest in possible Democratic candidates. This interest has been reflected in the memecoin market, where investors are trying to capitalize on the hype surrounding these figures.

Additionally, memecoins tend to be heavily influenced by social media trends. With names of potential candidates circulating on platforms like Twitter, Reddit, and TikTok, it’s no surprise that related memecoins have attracted the attention of investors.

The Decline of “Jeo Boden” and the Role of Social Media

In contrast, the memecoin “Jeo Boden” has seen a dramatic decline in value, falling by more than 30% in the past day. This decline can be interpreted as a reflection of investors’ diminishing confidence in Joe Biden’s political future. As speculation about his retirement increases, interest in a memecoin dedicated to him is decreasing.

Furthermore, the decline of “Jeo Boden” could also be a consequence of the memecoin market itself, which is known for its extreme volatility. Investors who had bet on “Jeo Boden” may have moved their funds to the new emerging memecoins, looking to profit from changes in the political landscape.

Social media plays a crucial role in the spread and popularity of memecoins. Online communities on platforms like Reddit, particularly subreddits like r/cryptocurrency and r/wallstreetbets, often serve as epicenters for discussion and speculation about memecoins. When a new meme or political figure goes viral, related memecoins can see a rapid increase in value.

Additionally, social media influencers and celebrities can have a significant impact. Tweets and posts from influential personalities can drive thousands of people to invest in a specific memecoin, further fueling hype and market volatility.

Final considerations

The rise of memecoins inspired by potential replacements for Joe Biden and the simultaneous decline of “Jeo Boden” highlights the unpredictable and volatile nature of the cryptocurrency market, especially memecoins. While these digital currencies can offer quick profit opportunities, they are also subject to drastic fluctuations based on social trends and political speculation.

For investors, it is essential to approach this market with caution, be aware of the risks, and not invest more than you are willing to lose. Memecoins are an interesting cultural and financial phenomenon, but like all trends, their value can be ephemeral and subject to rapid change.

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