The Memecoin Tails: Will They Still Wag in the Near Future?

• Memecoins are cryptocurrencies which have a meme as their inspiration.
• Dogecoin, FLOKI Inu, Shiba Inu and PEPE coin are some famous memecoins in the market
• High volatility rate, Rug Pulls, and no long-term viability are some major challenges to these coins, which may even bring their end.

If nothing, then the memecoins have contributed tremendously in attracting the general public to the world of cryptocurrency. Memecoins are crypto coins that are based on some humorous theme and were primarily built as a joke to mock cryptocurrency, but later gaining community support and startling tweets, now have a market cap of billion dollars. 

The Tail of DogeCoin, Shiba Inu and More

Dogecoin

Dogecoin was the first memecoin to release into the market, which was based on the popular Doge meme. It started as a joke and was gradually building its community until Elon Musk tweeted expressing his interest and support for Dogecoin in May 2021.

This led to a boom in the price of Dogecoin and the number of people adding to its community and Dogecoin buyers increased, as Elon Musk continued tweeting on Dogecoin. This was termed the Musk Effect.

Shiba Inu

Based on the ancient Japanese breed of dog, Shiba Inu, which appeared on the Doge meme, another memecoin by the name Shiba Inu was created in August 2020. 

Now, Shiba Inu has a billion-dollar market cap and its own website, which goes by shibatoken.com.

Visiting the website is itself an experience. It guides users on its different tokens like SHIB, BONE, and LEASH. The blockchain network Shibarium promises to bring evolution to the Shiba Ecosystem.

Shiboshis is a 10,000 NFT collection representing Shiba Inu with different traits and making them completely unique. The website has much more, but what does an average user wonder while browsing the website?

FLOKI Inu

If the story of Dogecoin and Shiba Inu seemed funny to you, the origin of this memecoin will make you roll down laughing. Floki is the pet dog of Elon Musk, and after acquiring Twitter, Elon tweeted of his desire to make Floki the CEO of Twitter.

This led the community in support of Floki and the launch of a community driven memecoin, FLOKI Inu. It stands on the pillars of Meme status, charitability and utility. It aims in spreading awareness to the general public regarding cryptocurrency, FLOKI ecosystem through its Floki University Crypto Education Platform. 

PEPE Coin

The latest Meme coin, launched in April 2023. Its website says it has no intrinsic value and that no financial return should be expected. It’s useless and just for entertainment purposes.

Having said this, let’s look at the market cap of different memecoins. 

Logic Behind these Illogical Memecoins:

Everyone, including the investors and crypto exchange firms who have listed these coins, know that these are just a joke, and are just a mockery to the decentralized finance system the cryptocurrencies promised, but still, people seem to be investing in them and raising their market camps to millions.

What drives them, is there a logic these coins have found?

Memecoins are supported by their two pillars of story-telling and community building. All these coins have originated from some incident, and they narrate a good story of it and the community has a feeling of Fear Of Missing Out (FOMO), towards them.

The developers look at the most illogical meme that would attract the most logical people and target them to invest in these illogical coins.

The people who are investing know it’s a risk and understand it’s a gamble, but they still do it because it makes them feel good. However, the early investors, the crypto savvy, are most benefited, and till the news of a new coin reaches the common people and they invest, it’s too late, making them lose money. 

Another factor is the large number of whale accounts in these tokens. It means a few people own a large share of these tokens, and they influence the fluctuations in price of these tokens. 

The Original Question of a Dead End

CoinMarketCap claims that presently there are nearly 340 memecoins present in the market, and with new coins emerging, the answer is NO, but do they hold a value?

The expert investors do not themselves invest and even advise others not to invest in them. The reasons are their high volatility, no long-term viability, and cases of rug pulls, where the developer after creating hype, runs off with the investments.

Although holding a memecoin is similar to cheering for your team but, are you willing to keep hooting even at your financial risk?