The rise and fall of Meme coins.
We all know meme coins are a scam, and if you don’t, you will find out the hard way. That is actually the point of them, coins like Doge, Shib, SafeMoon, Cum Rocket, and Ass Coin will all eventually go to zero, but will first give the biggest pump in the entire market due to the amount of greed, emotion and general lack of market dynamics. The origins of meme coins over the last year started with Elon Musk tweeting about Dogecoin, which he has done in the past.
What is different about the current market is people have easier access to the crypto markets than ever before. So when you combine extremely easy access to buying a coin and the power of social media, while the richest man in the world is pumping it on twitter, it creates the biggest pump and dump in the history of financial markets. At one point, Doge had a higher market cap than Ford, GM and Chevy combined. Keep in mind Dogecoin has zero purpose.
Just because they are scams, doesn’t mean you should just completely ignore them. In fact, in crypto scams tend to pump the hardest. Let’s take a look at some notable meme coins over the last year and their performance.
- Dogecoin, +11,253%
2. Shibu Inu, +745,205%
3. SafeMoon +18,960%
4. CumRocket +2,109%
Trading is a zero sum game, for every winner there is a loser and in extremely volatile market like cryptocurrency, there are many losers. Even though you see these extreme gains, most people that participated in these coins lost money or didn’t make anything.
The trick to trading meme coins is you want to make sure to get out before they top and get fully out. Obviously this is a lot easier said than done, personally I have always sold my bag in percent tranches on the way. For example 20% at one price, 20% at another price until I am 100% out. Generally meme coins should never be long term holds because the massive % gains are not sustainable and very commonly will draw -99% from the top.
It is very common in crypto for “communities” to form around these coins, in reality these people are just coping from not selling on the way up as they watch what was once a great fortune melt away into nothing.
