From BALD to PEPE, Meme Coins encapsulate the best and worst of crypto
Last week, BALD, a meme coin poking fun at Coinbase’s Brian Armstrong, surged 400,000% before dropping to zero when the developers disappeared with millions of dollars in liquidity.
Unfortunately, rug pulls such as this are common with meme coins with many in the crypto community saying 2023 has seen some of the worst examples. But that doesn’t mean all meme coins are bad.
Earlier this year PEPE proved that simple playfulness can capture the crypto community’s imagination and make a meme coin project insanely popular.
Meme coins serve as a double-edged sword, highlighting both the best and the worst aspects of the crypto industry. Even the biggest crypto fanatics have a love-hate relationship with meme coins
Since its inception, this special sub-category of cryptocurrency has offered substantial rewards but also potential risks for the wider crypto community. Let’s look at meme coins in more detail and see how they truly encapsulate the…?
The bright side of meme coins
Meme coins have injected an undeniable sense of fun and a spirit of rebellion into the cryptocurrency industry. They have made investing more accessible for those who may not otherwise be able to join in.
Coins like Dogecoin, which started as a joke but gained significant traction, show the democratic nature of the crypto industry. Meme coins create a sense of unity among their users, often fostering communities where people can share knowledge, strategies, and the sheer excitement of being part of a new financial revolution.
Moreover, meme coins have the potential to generate high stakes profits!
For example, investors who bought into Dogecoin in its early stages and held onto coins have experienced incredible returns, with Doge currently seeing a 300%+ increase since its release. This doesn’t factor in its all time high price either!
This surge in value underscores the potential for everyday investors to find opportunities in the crypto market that were once only available to a select few.
The dark side of meme coins
However, the same characteristics that make meme coins so exciting also contribute to their potential drawbacks. The instability and unpredictability of these coins are among the most alarming aspects.
The value of meme coins is usually determined by their social status amongst the crypto community, rather than by their actual inherent value. Social media helps to mold meme coin value, along with celebrity endorsements and other forms of digital marketing used to promote a project.
While DOGE is only valued at a mere $0.07, it has a market capitalization of $10.36 billion and 3.8 million followers on Twitter. At all time highs, Dogecoin has hit $0.54 and, of course, has backing from Elon Musk.
Despite the online incentive for Doge, it has barely touched $0.10 in price this year alone!
But does this really make it a good investment, and most importantly, does it help the broader ideas surrounding cryptocurrency?
Moreover, the decentralized nature of the crypto market, one of its key selling points, can also make it a hotbed for fraudulent activities. Scam coins are not uncommon, exploiting the hype surrounding meme coins to trick unsuspecting investors.
A prominent example of these is Ben.eth. This crypto crook has managed to launch three, yes, three scam projects that have left investors out of pocket. Be sure to stay clear of:
- BEN token
- LOYAL token
- PSYOP token
The lack of regulation and oversight in the industry means that individuals must exercise extreme caution when investing. We saw an influx of influencer based marketing for crypto and blockchain projects during the 2021 bull run. Lawmakers cracked down on this significantly, although due diligence around meme coins is always necessary.
The SEC has recently issued regulations on the crypto space and how influencers are promoting projects such as meme coins.
John Reed Stark, former chief of the SEC has warned influencers that their promotion of projects will catch up to them with intervention from the law. Many influencers have already faced lawsuit action, including:
- Graham Stephan
- Jake Paul
- Lil Yachty
Another example is Francis Sabo, who was charged $100 million for securities fraud, after promoting and shilling crypto projects via social media to his followers. These rules will apply heavily to crypto meme coins if they are,, of course, pushed now by influencers.
Meme coins can also be questioned for their environmental impact. The energy-intensive process of mining cryptocurrencies is well documented, and while not unique to meme coins, this is an issue that applies to them too.
Given the increasing emphasis on sustainable practices in all industries, this is a challenge that the crypto world will need to address.
Are meme coins even useful?
The end question tickling many people’s tongues will be “Are meme coins even useful?”.
Well, that question is up for debate. Most meme coins are created for pure novelty; after all, they are based on internet memes that shouldn’t be taken seriously. Developers of meme coins don’t necessarily give their projects much utility in their whitepapers.
Again, we can’t expect much from a joke on the internet. Meme coins such as SHIB and FLOKI have their own ecosystems within which they operate. Whether as a governance token or a utility token for a crypto game.
However, as we have seen more mainstream adoption of crypto, more utility has been created. Elon Musk in particular has pushed for this, adopting Dogecoin as a form of payment for his Tesla cars. Other retailers have followed, including Microsoft and AMC cinemas.
TwitterX, Elon’s new rendition of Twitter, has also pointed towards integrating payments into their app. Maybe Elon’s love for Doge could spark a new use case for Doge?
Closing thoughts on meme coins
Meme coins symbolize the hope and danger of the crypto industry. They embody the democratizing power of technology, offering ordinary people the chance to participate in the global financial market.
However, they also highlight the potential risks of a market characterized by volatility, scams, and environmental concerns.
As we navigate this new frontier, it is crucial to balance optimism and caution. Education, regulation, and innovation will play vital roles in harnessing the power of meme coins while mitigating their risks. The rise of meme coins serves as a reminder that the world of cryptocurrency may be filled with possibilities, both positive and negative.
In the end, the story of meme coins reflects the broader narrative of the crypto industry. It’s an exhilarating ride into an unknown future — a journey of high risks and potentially high rewards.
It’s an adventure that captures the imagination of crypto lovers, even as it challenges our understanding of finance and technology.
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