In 2021, the meme market saw exponential growth, especially dog-themed memes. As of November 2021, the 2 most popular tokens are Dogecoin (DOGE) and its rival Shiba Inu (SHIB). MEME tends to be highly volatile compared to major cryptocurrencies such as bitcoin (BTC) and ether (ETH). This is possible because meme coins are community-driven tokens. Their prices are often influenced by social media and online community sentiment. This often brings a lot of hype but also FOMO and financial risk. While it is true that some traders have become rich thanks to the meme coin, many have lost money due to market fluctuations.
Doggy duo Dogecoin (DOGE) and Shiba Inu (SHIB) lead the meme coin pack and skyrocket in price and market capitalization. As of November 2021, DOGE has increased over 8,000% since the beginning of the year and is ranked 9th by market capitalization on CoinMarketCap. Its competitor, SHIB, has pumped more than 60,000,000% since January.
Why is MEME coin exploding?
Why are memes so popular?
While it is difficult to pinpoint specific reasons, some say that during the COVID-19 pandemic, the cryptocurrency market has grown as retail investors want to hedge against inflation. The meme coin also exploded amid hype, growing in both market capitalization and diversity. Recently, the possibility of an outbreak of conflicts between countries has led to investors' concerns that their currencies will depreciate and that traditional money-making channels no longer work well when inflation is taking place. is a reason why traditional investors invest money in these lottery tokens to bring in profits more quickly.
Potential risks when investing in meme coin
MEME coin may have grown exponentially in 2021, but like all cryptocurrencies, trading and investing in meme coins carries high financial risks because it is unknown whether it is institutional or individual. Whoever is behind, this is also the reason for its attractiveness
First of all, the meme coin's encryption system can be worrying. Take Bitcoin as an example. It has its own blockchain, a well-written white paper, an established ecosystem, and a deflationary nature. We are also seeing more institutional adoption of bitcoin in recent years. Compared to BTC, most meme coins have inflation and do not have a maximum supply. Their ecosystems, use cases, and fundamentals are often defined by the collective jokes of the community. There are only a few meme coins built on the technology of major cryptocurrencies. For example, DOGE's technology is derived from Litecoin (LTC) and SHIB is built on the Ethereum blockchain.
Another potential risk is that meme coins are more communal than cryptocurrencies with larger market capitalizations. This fluctuation continuously leads to unexpected pumping and discharging. The life cycle of a meme coin is usually short. Their prices can skyrocket thousands of times due to celebrity shills or FOMO, or drop unexpectedly when the community decides to move on to the next meme coin.
As the meme coin market continues to grow, you should be aware that there may be projects that take advantage of the hype to scam traders. For example, Squid Game (SQUID), a meme coin inspired by the popular Netflix show of the same name, is up more than 86,000% in a week. However, the development team suddenly pulled the rug and caused the price to plummet by 99%. All meme coins exploit the greed of investors to have strong price increases
In the first half of 2024, the MEME coin market has become vibrant again with the green frog PEPE, which has increased sharply by 1000% from the bottom, bringing the MEME market back to life. These are MEME tokens that are gaining attention in the first half of the recent year
DOGE, SHIB, PEPE, BONK, FLOKI, WIF, BOME, 1000SATS, MEME, PEOPLE, 1000RATS
Let's learn about MEME tokens with Binance: Link (https://www.binance.com/en/markets/coinInfo-Meme) and Link (https://academy.binance.com/en/articles/what -are-meme-coins)
Do you have any predictions about which MEME coin will lead the market in 2024? Let's discuss with May!
