From joke to investment: The surprising resilience of memecoins in crypto

admin April 16, 2023

0 4 minutes read

Memecoins and investments are words that are not often heard together in a sentence without being ironic.

However, a year into the bear market, memecoins such as Shiba Inu and Dogecoin not only survived, but performed as well or better than many “real” cryptocurrency projects.

Additionally, despite difficult market conditions, memecoin has some of the fastest growing and most active communities in the crypto space.

Market capitalization of Doge&SHIB

People must also be aware of landmines, but will memecoins be a positive force for retail investors in 2023, such as the influence of giant whales even on the largest memecoins?

Join Footprint Analytics Alexander of Pointsville, Zanderfounder of HumbleHedgeDAO, and peterICHI Community Lead, Discussion in the Twitter space.

1. Mimecoin is great for traders

Crypto traders need volatility. Volatility is what makes trading a worthwhile market. And there is no more volatile type of token, no meme-based token with less utility than the so-called meme coin. (However, that definition must be revised, and several memecoins are now building utility.)

“Any time Elon Musk posts a picture of his dog, he’s guaranteed a 10% profit on a ton of meme coins,” Alex said, whether you think that’s a good thing or a bad thing. I added that it was not a problem.

“The free market doesn’t care what we think.” [the memecoin market] It’s the freest market that exists. Memecoins have little utility, are highly volatile, and are the nature of the free market. “

In many ways, memecoins are similar to luxury goods like sneakers, where prices correlate with hype rather than utility.

“This value is very much in line with market sentiment,” said Xander.

“How does something without utility get value? With sentiment. And there are people in this space who know how to ride emotion. It’s pure marketing. No, but the market doesn’t have to understand what it means rationally.”

2. Memecoin expands beyond just memes

The footprint was previously Shiba Inu ecosystemThe token started as a joke in 2020, but the community has since built ecosystems on DEXs, NFT marketplaces, L2 including DAOs, and Shibarium.

Many memecoins have also become philanthropic at the core of their usefulness.

“We classify them as memecoins, but if you look at Shiba’s progress, it has gone quite a bit from memecoin to concept to doing something with Shibarium,” said Peter. “I think once the company has a very loyal team and they start building it, they can really get out of the memecoin realm and have a real use case. It will be a game changer to transition to

Memecoins continue to grab people’s attention, which is great during bull markets and periods of high volatility. Traders are interested in both rising and shorting tokens. However, sustaining value over time requires a quest to build utility.

“Shiba Inu has tried to do quite a bit with the NFT Marketplace. Mimecoins are used for humanitarian things that can attract attention. Organizations, foundations or independent teams invest more in communities and infrastructure. If so, that infrastructure may offer other services,” says Alex.

“The one that makes the most sense to me would be video games. In my opinion, these are the closest things to memes and trading. Second, to maintain that community beyond trading.P2E makes sense for something like Dogecoin, which has no cap and can continue to create tokens.”

3. Mimecoin trading requires accepting that whales make waves

The top 100 wallets holding DOGE hold 70% of the total supply.

This is the reality of the universe. Fortunately, whales are rational actors in the free market. Community growth also brings new liquidity.

However, traders should understand the dynamics.

“I think most traders know that whales can make waves. I understand how it rolls,” said Alex.

“You’re riding the distance between market liquidity levels,” added Xander.

“When it comes to speculative trading, that’s the only protection, except perhaps information you know. Whales must protect their interests.” [and aren’t just going to dump.] Protection is a free market dynamic, so if you want to protect yourself, learn how the free market works. “

4. Memecoins Help Bring New Users Onto Cryptocurrencies

The blockchain space is filled with incredibly dense jargon and technical developments that can scare newcomers. Still functioning in line with management.

“Most of the time they are easy to understand,” says Xander. “You can still use them as an exchange of value. You can send them anywhere in the world with no middlemen.”

“I think it’s really cool that in the crypto space there are these simpler coins that can be easily exchanged. However, SHIB is breaking this mold, you don’t need to read the white paper on DOGE.”

Peter also said that Memecoin “provides a transition for people who don’t know much about cryptocurrencies to enter the space.

“Hey everyoneBitcoin’s rd; it’s almost like old school stuff. But they look at these meme coins and they have these funny pictures and they’re eye-catching. And that is good marketing of crypto to the general public. “

“It’s really easy to jump into Web3 and get involved. If you’re a speculative investor, you’re part of Web3. So I think it’s a good way to get your feet wet.”

This work was contributed by the Footprint Analytics community. Meme Token Dashboard.

The Footprint Community is a place to help data and crypto enthusiasts around the world understand and gain insight into Web3, the Metaverse, DeFi, GameFi, or any other area of the budding blockchain world. Here you’ll find vibrant and diverse voices who support each other and move the community forward.