What is a meme coin and should you buy one?

The memecoin craze begins in 2021, when Dogecoin (DOGE) and Shiba Inu (SHIB) explode and many memecoins appear in the aftermath in an attempt to replicate this success. This type of cryptocurrency, often with the image of a dog of the Shiba Inu breed and associated with jokes, seems to have become firmly anchored in the crypto landscape.

What is a same corner?

THE memecoins are a type of cryptocurrencies that are inspired by internet memes. The first was born in 2013 with the Dogecoin (DOGE), and it is a parody of Bitcoin and other cryptocurrencies. To introduce memecoin genesis is to introduce Dogecoin.

The DOGE is just a joke whose humorous character is based on the same Internet of the Dogewith a Shiba Inu mascot, a breed of dog originating in Japan.

The same Doge, at the origin of memecoins

Figure 1: The same Doge, at the origin of the same coins

Technically, Dogecoin is just a simple fork of Luckycoin, itself a fork of Litecoin which brings nothing more: an alternative to other cryptocurrencies.

Investors know what to expect and Dogecoin is slowly gaining a reputation between 2014 and 2017. It becomes the iconic cryptocurrency industry memeamusing investors and observers.

The price of Dogecoin takes off in 2017 going from a $20 million valuation to over $1 billion. But it is in 2021 that everything changes.

Indeed, the Dogecoin makes a sensational entry into the top 10 cryptocurrencies the most valued on the market alongside Ether, BNB or even Solana, this time with the support of the billionaire and founder of Tesla, Elon Musk.

The rise of the price of Dogecoin (DOGE) in 2021

Figure 2: The incredible rise in the price of Dogecoin (DOGE) in 2021, +29,000%

The phenomenal success of Dogecoin gives ideas to other individuals. August 2020, the Shiba Inu (SHIB) is created and less than a year later, its valuation exceeds one billion dollars.

With the successive successes of Dogecoin and Shiba Inu in 2021, the madness of the same corners begins. Several of these humorous cryptocurrencies are available for purchase and sale on exchange platforms such as eToro or Binance.

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πŸ‘‰ To learn more, see our detailed analysis on Dogecoin (DOGE)

What are the most famous memecoins?

The same corners are many, but few have managed to climb to the top of the ranking of the most valuable cryptocurrencies of the market.

Here are the most valued on the market at the time of writing these lines (January 2023), accompanied by the year of their creation and their capitalization:

  • Dogecoin (DOGE), 2013: $12 billion;
  • shiba inus (SHIB), 2020: $6.4 billion;
  • Dogelon Mars (ELON), 2021: $185 million;
  • Baby Doge Corner (BABYDOGE): 2021, $170 million;
  • FLOKI2021: $92 million;
  • BONK2022: $58 million.

Most memecoins are cryptocurrencies bearing the likeness of animals like dogs or famous personalities like Elon Musk.

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It should be specified that all the same corners are very far from having been successful. In reality, the vast majority are worthless and has some very wacky themes. The most popular have a Shiba Inu as their mascot, which gives us a first clue.

Beyond their humorous dimension, some meme corners were able to seduce by their philosophy: these are cryptocurrencies created by the people and for the people.

The slogan of Dogecoin (DOGE) is β€œ The People’s Cryptocurrency β€œ, or β€œThe cryptocurrency of the people”. As for the Shiba Inu (SHIB), it is a token entirely governed by its communitycalling itself the ShibArmy.

This completely decentralized and wacky side appeals to some investors who want to thumb their noses at more classic cryptocurrencies, while others only want to support the community of their favorite coin.

Moreover, the support of billionaire Elon Musk at Dogecoin is certainly no stranger to this success. The latter mentioned Dogecoin for the first time in April 2019 in a tweet mentioning that Dogecoin could be his favorite cryptocurrency.

Since then, the CEO of Tesla has mentioned this same coin many times, even specifying that he has one. His influence on memecoins is such that one of his tweets is enough to propel their price up.

THE Dogelon Mars (ELON) was born to ride that hype by combining the Doge meme and Elon Musk’s vision to conquer Mars, while the meme coin FLOKI was born in honor of the billionaire’s dog, a Shiba Inu named Floki.

The madness of the same corners also followed the stratospheric flights of DOGE and SHIB courses. Many opportunists then sought to replicate this successsince this type of cryptocurrencies does not need to bring anything new at the technical level, it is extremely simple for anyone to create one.

As for investors, many are likely victims of FOMO (Fear Of Missing Out): either the fear of missing yet another spectacular ascent like those experienced by Dogecoin or Shiba Inu, or of missing the next same corner that will smash all records. Speculation is then a very powerful engine for the same corners.

Finally, and this last point is rather a psychological biasthe same coins only cost a few cents, even fractions of cents of a dollar.

Some inexperienced investors then think that it is enough to buy a lot of tokens, and that if the unit price is very low, then the potential for gains is higher.

Wrongly, of course, since the unit price of a token is relative to the number of tokens in circulation: the more there are, the lower the unit price will be. Thus, the total valuation of a cryptocurrency is a much more interesting data to observe than the price of the token alone.

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Buying a memecoin, a good idea?

Investing on the same coin is very risky: it is one of the riskiest types of cryptocurrency who exist. Indeed, as we have seen, the same coins often do not offer any technical innovation.

Their use cases are generally limited or almost non-existent, so many have no nothing concrete to rely on. On top of that, meme coin tokenomics are often worrisome, with extremely high inflation.

Furthermore, the same corners are subject to stronger speculation than other types of cryptocurrencies, which means that their volatility is very high, and even more so if their valuation is low.

Prices can thus increase very quickly and with a very large amplitude, to the delight of many investors. However, the reverse is also true, and many leave feathers there.

A same corner lives and dies by its community, and by its community only. So, if the latter ends up turning away from it, out of weariness or because a new, more attractive coin has emerged, the price can collapse in an instant.

Note that Dogecoin (DOGE) and Shiba Inu (SHIB) are the only meme coins with a large community and high valuation. Other memecoins fighting to emulate the successes of these two giants.

To conclude, if you want to invest in the same coin, we can only recommend that you do in-depth research on the subject in view of the risk inherent in this type of cryptocurrency. Many scams also surround the same corners, and it is better to stay away from them as much as possible to protect your capital.

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Sources – Figure 1: Dogecoin, Figure 2: Trading View.

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