Ever since the advent of Bitcoin in the latter half of 2012, the idea behind a digital currency has become incredibly popular to investors as more and more people get interested in cryptocurrency.
As one would expect, this phenomenon has driven large corporations and even individuals to create and release all sorts of cryptocurrencies in the market. The reasoning behind this is to serve as a way for people to send money over the internet. But amongst these cryptocurrencies, certain coins were inspired not by this reasoning but by social media jokes or puns. These are called meme coins.
What are meme coins?
As the name suggests, meme coins are cryptocurrencies inspired by memes, which are popular ideas or thoughts spread via the internet, usually in the form of multimedia (e.g., photos, videos, GIFs, etc.). For example, there is the Doge meme on the internet, a 2013 meme consisting of an image of a Shiba Inu that is often used to tell different types of jokes.
While the origins of these coins may have been jokes, their presence on the financial market isn’t. Dogecoin may interest you as it’s currently ranked number 13 with a market cap of 21 billion dollars. As an alternative to Dogecoin, you may also want to buy Shiba Inu Australia. This meme coin has a relatively high market cap of 16 billion dollars.
How are meme coins different from normal cryptos?
It’s important to note that while meme coins are essentially still cryptocurrencies, they’re not the same as the typical ones. Bitcoin, Litecoin, Ethereum, and other mainstream cryptocurrencies were created to promote an alternative payment system via the internet. Meanwhile, the purpose of meme coins is to make a quick buck (and some of them actually will, until the value drops and everyone loses interest). They’re developed to be traded, used on the market, and can provide no real-world application.
Some may say meme coins were released solely as a joke. Take the Shiba Inu coin, for example. An anonymous person created this particular coin only to poke fun of Dogecoin, yet it now ranks number 13 after only two years.
This makes cryptocurrencies like Bitcoin and Ethereum far more valuable than most other meme coins. So, while Dogecoin and Shiba Inu can increase their overall value, there’s no guarantee it will happen. Investing in meme coins can be a profitable venture, but experts believe they are highly volatile since they cannot predict their price movements.
Are meme coins worth investing?
If you invested in Shiba Inu coins in March 2021 when its price was a hundred millionth of a US dollar, you would’ve earned around USD$8,000 for every dollar you spent if you sold it in October that same year. So, can meme coins make you rich? Sure. But does this mean they’re worth investing in? Unfortunately, that’s a question with no decisive answer.
Remember that the price of meme coins is driven by the current hype brought by social media platforms and influencers. Therefore, there’s no guarantee that it’s here to stay.
On the one hand, Dogecoins may continuously drop in price for the next couple of months, and by the end of the year, it’ll become completely obsolete. But on the other hand, one may argue that the hype for Doge memes, and consequently Dogecoins, may increase in the following months. In short, it’s highly volatile, and the price changes are a both massive and unpredictable.
Nevertheless, meme coins remain one of the most exciting investments you can make, and they can certainly help with diversifying your portfolio. Think of it as a high-risk, high-reward option.
How can you buy meme coins?
If you insist on buying meme coins, it’s important to note that the process is not different from buying or investing in mainstream cryptocurrencies. Here’s a closer look at how the process goes:
Find a broker or crypto exchange on the internet. It’s best to make sure the platform is reputable since certain agencies attempt to scam people out of their money. Reputable ones usually require users to verify their accounts. If you want to use their services, the agency must have strict policies.Deposit cash into the platform to use for investments. Investing in any asset is impossible if you don’t have any balance on your account, so make sure to deposit first.Select a meme coin. With an account and money, it’s time to select a meme coin. Make sure you do your research first, as there are currently 124 meme coins on the market.Indicate how you want to store the meme coin. You can either leave it on the exchange or keep your asset on a hot wallet outside the platform.
Ultimately, not many people are aware of the potential earnings from meme coins, meaning many individuals managed to climb the ladder overnight because of it. However, you must remember that for every person who makes it big, a significant number of people can still potentially lose money after investing in meme coins.
The post What are meme coins and are they worth investing? appeared first on The Block.
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