Memecoins
New coins challenge incumbents
Meme-coin mania is in full force in 2024, with cryptocurrency speculators and even serious, large-scale investors getting involved in the space. However, not all meme tokens are built the same, so traders and investors should always conduct due diligence and understand the risks involved.
The term “meme” has been around since the 70s, but its use in popular Internet culture has brought the concept into financial markets. You may have heard of meme stocks like GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC), which are volatile assets that have provided quick returns for some traders but also quickly lost money for investors who made ill-timed trades.
Likewise, meme cryptocurrency coins move quickly in both directions. As a result, these tokens attracted many speculators and serious investors in the 2020s.
With research and patience, you may find the file best meme coins to invest in for summer 2024.
The surprising growth of meme coins
Meme coins are different from other cryptocurrencies due to their lighthearted nature. However, the profits and losses from trading them are real, so meme tokens should be taken seriously.
These coins can depict animals and other types of characters or even political figures. Additionally, meme coins are really attention-grabbing and tend to include an element of humor.
Perhaps most importantly, meme tokens are highly community-driven. Therefore, the element of investor engagement on social media platforms such as X and Reddit is of paramount importance.
Therefore, intrinsic value and real-world utility can sometimes be underestimated with these tokens. We look at Dogecoin (DOGE-USD) as a great example. Imprinted with the design of a Shiba Inu, Dogecoin was the first meme coin, dating back to 2013.
Few people took Dogecoin seriously upon its initial release. However, the total market capitalization of the token is huge $60 billion starting from June 2024.
Dogecoin, which operates as an independent, proof-of-work (PoW) blockchain, remains the most valuable meme coin today. However, it certainly isn’t alone among today’s most popular meme tokens.
Indeed, Ethereum (ETH-USD) blockchain-based ERC-20 tokens such as Shiba Inu (SHIB-USD) and Pepe (PEPE-USD) have also gained popularity, collectively growing in market value to over $100 billion. dollars in 2021.
Dogecoin and Shiba Inu are similarly themed tokens that both carry images of Shiba Inu dogs. There is a friendly rivalry going on between the communities of these two fascinating meme coins and the Dogecoin vs. Shiba Inu the debate continues today on social media.
While not a meme coin itself, Solana (SOL-USD) played an important role in the emergence of meme coins. The popularity of this token has exploded due to the low transaction fees of the Solana blockchain and the ease with which tokens can be created on the blockchain.
New Solana based meme coins, including a number of Solana Program Library (SPL) tokens, have emerged recently. Some examples of new meme coins include dogwifhat (WIF-USD) and Jeo Boden (BODEN-USD), which continue to gain traction among cryptocurrency enthusiasts.
The old guard against the new generation
It might seem strange to label Dogecoin and Shiba Inu as meme coins of the old guard. However, they are two of the most established meme tokens as they have been around for a while and have name recognition among cryptocurrency traders.
The idea here is not to pit older meme tokens against emerging ones. However, there are some trends and changes that meme coin traders should pay attention to.
For example, investors can take note of open interest, which measures the aggregate value of an asset’s current unrestricted holdings across all traders/investors, both retail and institutional. Believe it or not, the collective open interest of meme coins does exceeded 3 billion dollars.
Don’t get the wrong idea. Dogecoin is still the top dog among meme coins. In fact, open interest in Dogecoin recently reached a record $1.8 billion.
At the same time, new kids on the block like Pepe are biting at Dogecoin’s heels (or paws). In May, open interest in the Pepe coin increased by nearly 50% to an eye-popping $850 million.
Again, the idea here is not to divide investors into those of the old school and those of the new school. This is still a large and growing community among meme token investors where the success of one coin can benefit the meme coin space as a whole.
Indeed, there is no denying that it is a rapidly expanding space. In March (using a seven-day average) and on centralized exchanges, meme coins reached impressive levels $13 billion in spot trading volumes. As a result, collective trading volumes of meme tokens have surpassed those of non-meme tokens such as Ether (ETH-USD) and Solana.
It just goes to show that a sense of community and fun can turn little-known resources into real successes. Therefore, while always keeping your position size reasonable, feel free to conduct your own due diligence on the wild and wonderful world of meme coins.