Hello, community! We believe that each of you enjoys scrolling through memes on social media. However, not everyone knows that meme culture has become so influential and all-encompassing that it has even found its way into cryptocurrency. Specifically, there is a separate category of tokens dedicated to memes. This category is aptly named “memecoins,” and today we’ll dive into it.

But before we begin, let’s remind you that we’ve already discussed why affiliates should consider cryptocurrency as a method of diversifying assets. We recommend giving it a read!

Memecoins – “What are we, a joke to you?”

Memecoins are a category of altcoins that reflect popular memes: PEPE is dedicated to the famous frog, Dogecoin to a meme-worthy dog. There are even tokens inspired by Trump and Musk, which can also be viewed as memes.

The main feature of memecoins is the lack of any practical value. Essentially, they’re just “wrappers,” whose worth is mostly driven by the hype surrounding cryptocurrency as a whole. Thus, for now, while we are dealing with a bull market that began before the halving and gained new momentum after the U.S. elections, memecoins are once again gaining popularity.

Even though memecoins are hard to take seriously, you should understand that they hold a solid position in the market. Take Dogecoin, for example – one of the most popular meme coins, whose price was significantly boosted by Elon Musk. Currently, it is the seventh most popular cryptocurrency, with a market capitalization of an impressive $35.75 billion!

However, it’s worth noting that achieving such a level took over 11 years. The coin first appeared in 2013, and during this time, Dogecoin has grown from a simple joke token into a standalone decentralized blockchain network. This transformation wouldn’t have been possible without the belief of the community.

Some other memecoins are also trying to attract serious investors by proving that their token is more than just a wrapper. A prime example is Shib and Floki, which are focusing on developing their own metaverses, NFT platforms, and more. Although it cannot yet be claimed that this has positively impacted their prices, the decision to create ecosystems based on memecoins is becoming a trend that could have significant implications in the future.

How is the value of memecoins determined?

The main characteristic of memecoins is their volatility. If you want to multiply your investment by three or four times, the greatest chance to achieve this is to buy a memecoin. On the other hand, you also risk reducing your balance by three or four times, as volatility can work against you as well.

Memecoins depend on the following factors that influence their value formation:

  1. Overall hype. When the market grows, so do memecoins.
  2. Popularity of the meme. If it’s something relevant and trending, the chances that such a token will be in demand – and consequently increase in value – are extremely high.
  3. Marketing campaigns by developers, aimed at attracting investors’ attention. Both Shib and PEPE spend money on advertising their products to stimulate investments in their tokens. As a result, these memecoins rank among the top 20 most popular ones (at least within Binance, which is very indicative).
  4. Statements from influencers. When Elon Musk spoke about Dogecoin, it contributed to the meme coin’s value growing by thousands of percent from its current price at the time. And rest assured, if he tweets tomorrow that you can pay for a new Tesla with Floki, it will also significantly boost the token’s value.
  5. Ecosystem development. For example, the creation of Shibanarium by Shib. All of this attracts more investments, which positively impacts the capitalization of a given token.

Another significant driver of price growth for a token is being listed on major platforms. For instance, if a coin previously existed only within the Web3 environment on a Tier-3 exchange, its price might multiply several times after its appearance on Binance. The reason is obvious: more people see the token and can buy it, creating demand that contributes to price growth. 

Should you buy memecoins?

We don’t want to take responsibility for your money. So, we emphasize that this is not financial advice. But.

Is there any point in investing in memecoins? Absolutely, yes. At a minimum, their volatility can work in your favor during periods of hype. But even if you’re not here to take risks and are considering only long-term investments, you shouldn’t ignore memecoins.

For instance, below you can see the market capitalization of popular meme tokens and their trading volumes.

We’re talking about billions of dollars! So, can memecoins still be considered just a joke? Perhaps this applies to some specific tokens. But the vast majority of popular coins have already surpassed that stage, and today they can be seen as full-fledged assets found in the investment portfolios of both Reddit no-lifers and UAE sheikhs.

And we remind you that the latest news from the world of cryptocurrency, all relevant AirDrops, and much more useful information can be found on our channel CryptoGeek, where we gladly welcome you!

With respect, your Geek!

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