Have you ever come across dog-imaged cryptocurrency? You have, right? So have you wondered what they are? How do they work? What returns can you expect from them?
So, for beginners as well as the ones with basic knowledge of meme coins, in this article, we have discussed some salient points related to meme coins, their risks, and how you should go about with them.
To understand better, read ahead!
What Are Meme Coins?
To simply understand the meaning of meme coins we will look at the phrase in two parts. First, let us discuss the implication of the word meme.
So what is a meme? A meme is an imitation, a copy of a humorous original that is spread rapidly over the internet by internet users. Now this humorous original can be anything ranging from images, videos, or even a simple one-liner text.
This concept of ‘spread rapidly’ determines the value of the meme. The more viral the meme is, the more popular it is. Time and again throughout the years we have seen memes going in and out of vogue, becoming cult symbols and basically winning people’s hearts and keeping them!
Now the second part of the phrase is pretty easy to understand. It is a coin. And by coins here we should understand cryptocurrency.
So by taking these two words together, we understand that meme coins are a type of cryptocurrency that is based on extremely popular internet memes. With time we have seen that meme coins have also based themselves on other humorous aspects viral on the internet that might not be memes in the strict sense of the word.
Facts About Meme Coins
- They are available on many but not all crypto exchanges.
- The first-ever Meme coin to be launched was the Dogecoin originating from the very popular Doge meme.
- Majority of the Meme-coins are SCAMs.
Now coming to the most awaited part of the article.
Should You Invest in Meme Coins?
Very simply put, people enter the cryptocurrency market to make money. Thus it is always recommended to expand your portfolios as much as you can.
Even my CA, he invested in Dogecoin, and not Bitcoin. Also, he was very happy as the coin made him a lot of money.
On the other hand, from their ATH, these meme-coins also dropped a lot in value.
Now back to expanding your portfolio.
What does expanding a portfolio mean? It means that once you enter the market don’t just stick to one cryptocurrency and keep on pouring your money into that. Instead, you can separate your investments in different cryptocurrencies, NFTs, and meme coins as well. And since the market of crypto is so highly volatile, putting your entire investment on one asset is a risk.
I would say invest. But all meme coins combined, you should not allocate more than 2 percent of your portfolio.
But compared to mainstream cryptos, meme coins are more volatile. Why? The reason is in the name. Because it is community-driven. What do I mean by that? I mean, that the value of a certain meme coin is determined by the popularity of that particular meme on the internet.
You see, when the memecoin is in vogue, then you can get awesome returns for your investment. But once that hype dies out, so does your money invested in that particular meme coin.
So is there any particular way to choose the most profitable meme coin?
How To Choose Meme Coins?
Well, there is no foolproof way to choose the right meme coin as such. The obvious thing that you should do before investing in anything is, do your research on the matter and diligently check out the market trends. And in the case of meme coins, look at the popularity of the meme as well.
Now here is the tricky part, while doing your analysis always go for the most consistently priced meme coins. When you check for popularity, do not automatically go for the most popular meme coin. No, don’t. Because their prices might soar overnight because of one particular event but it does not mean it is here to stay! To play on the safe side you can invest a very small amount of your portfolio on meme coins if you want!
For me, I would invest in Dogecoin and Shib and a small amount in Floki.
Most Popular Meme Coins
Presently three of the most popular meme coins are Dogecoin, Shiba Inu coin, and Floki.
They are seen to have given consistent returns over the years. So if you really want to try out your luck in this volatile market, you can go for these.
One very crucial thing to remember about meme coins is that this cryptocurrency is essentially propelled by Internet-based popularity and influencers. For instance, meme coins were not that hyped about until Tesla founder Elon Musk championed them.
So again it is not about whether the investment in meme coins is worth it or not, rather it is about how you do it. It all depends on how aware and how informed you are about the topic, about the market trends.
So, hope this article was helpful. All the best for your journey in meme coins!