I WOULD RATHER INVEST IN MEMECOINS
Let’s get the elephant out of the room. Utility tokens are like special coins you use within a blockchain to unlock features, pay for services, earn rewards, and sometimes even have a say in how things run. The success or failure of utility tokens is attached to their respective project. A shiny example is Ethereum and its native token Ether (ETH). ETH is used to power transactions in the Ethereum network and users also conduct DeFi activities such as lending and borrowing using Ether. Despite all these features, you can make more profit from memecoins than utility tokens
The ROI on memecoins is second to none, it defiles the laws of investment. How do I explain to my realtor dad that I casually flip $200 to 14 SOL ($1540) in three days? He would say that I am crazy to even think of that. But that is the story of memecoins. They are not driven by rational investment decisions, but rather by internet jokes (memes) and Fear Of Missing Out (FOMO)
Memecoins usually start as a joke and if the odds add up fine, the internet becomes saturated with memes about this coin. That’s when crazy things begin to happen; retail investors start hitting the buy button like a rat in a desert oasis. One may argue that this defiles logic. On the contrary, it is human nature not to feel left out. A psychiatrist and mental health specialist named Dr Ketan Parmar in an interview with Techopedia said people sometimes invest in meme coins because they see everyone else getting hyped, and they don’t want to miss out on the fun.
Examples of memecoins pulling insane ROI abound throughout crypto history. Bonk the first Solana memecoin made early investors a whooping 3300% returns in just 2 weeks. These memecoins also experience an insane influx of cash. Another remarkable Solana token dogwifhatWIF currently stands at a $438,380,532 market cap.
I love to trade memcoins on the Solana network because gasfees are significantly lower compared to other networks like Ethereum. Solana wallets like Solfare and Phantom Wallet have a wonderful User interface that allows even newbies to seamlessly buy and sell these memecoins. Lastly, following the success of memecoins like $BONK, $ANALOS, $MYRO and $WIF smart money has been moving to the ecosystem and you sure want a piece of that pie.
Of course, investing in memecoins is not all rosy as it seems. Shitcoin traders, like we fondly call ourselves have mastered the act of losing money to rugs like Buddhist monks have mastered the act of meditation. It's part of the game and we have a tough skin for it.
Before you buy that memecoin with your lunch money, Here are some things you have to keep your eyes peeled for
- Community number and strength. Community is the lifeblood of memecoins, these community members spread the word about the coin on the internet in the form of memes, they also buy up the tokens each time whales dump their tokens. Most memecoin communities are on Telegram, Twitter and Discord. Some communities also organize meme contests, this is a form of marketing whereby the community members compete to flood the internet with dank memes that stimulate crypto investors to buy.
2. Marketable narrative. The narrative is very important while trading memecoins. Tokens often choose between cats, dogs, and frogs. Recently, we have also seen a wave of dragons. Memecoins that are in tune with the market sentiment often do so well. Some tokens are even built off Elon musk’s tweet!
3. Trading volume and liquidity. You have to look beyond the hype. The trading volume tells you how much is being bought and sold within a given period. While high trading volume means lots of people are excited about the coin, low trading volume indicates there’s not much action. You also want to pick tokens with burning mechanisms. In crypto, burning involves permanently removing tokens from the market and reducing the total supply. Burning often increases the price of memecoins.
CONCLUSION
Investing in memecoins is very lucrative but is not without risks, the memecoin market is saturated with rugs and investors are advised to DYOR before buying any token. If you enjoyed this article, clap as much as you can. See you in the next!
Disclaimer: This article is written for educational purposes only and should not be considered as financial, investment or trading advice.