The market for meme currencies grew at an exponential rate in 2021, particularly for dog-themed meme coins. Dogecoin (DOGE) and its rival Shiba Inu are two of the most popular “breeds” as of November 2021.
Meme coins are cryptocurrencies that are inspired by memes. When compared to larger cryptocurrencies such as bitcoin (BTC) and ether (ETH), they are extremely volatile (ETH). This is most likely due to the fact that meme coins are significantly influenced by the community. Social media and online community emotions frequently impact their costs. This frequently results in a lot of excitement, as well as FOMO and financial risk. While some traders did make money with meme coins, many others lost money because to market instability.
Introduction
Some believe that 2021 will be the year of the “dogs” for cryptocurrency. Dogecoin (DOGE) and Shiba Inu (SHIB), a doggie duet, led the meme currency pack in terms of price and market value. DOGE has increased nearly 8,000% since the beginning of the year and is now ranked #9 by market value on CoinMarketCap as of November 2021.SHIB, a competitor, has increased by more than 60,000,000% since January.
What are meme coins, exactly?
Meme coins are cryptocurrencies inspired by Internet or social media memes or jokes. Dogecoin was the first meme coin to be developed (DOGE). DOGE was created in 2013 as a parody of the iconic Doge meme of a Japanese Shiba Inu dog.
Meme currencies are notoriously volatile. They are primarily community-driven, and due to online community recommendations and FOMO, they can quickly gain popularity. However, when traders shift their focus to the next meme coin, its price may drop unexpectedly.
Another feature of meme currencies is that they frequently have an enormous or limitless supply. Shiba Inu (SHIB), for example, has a total supply of 1 quadrillion tokens, whereas DOGE has no maximum supply and already has over 100 billion tokens in circulation. Because meme tokens do not have a coin-burning mechanism, their low price can be attributed to their large supply. Millions of meme tokens can be purchased for just $1 USD.
What is the appeal of meme coins?
While it’s difficult to pinpoint particular reasons, some claim that the crypto market expanded during the COVID-19 pandemic as regular investors sought to protect themselves against inflation. Meme coins also grew in popularity as a result of the hoopla, both in terms of market capitalization and variety.
It all began in late 2020, following the “meme stock” stories of GameStop (GME) and AMC Entertainment (AMC), in which the Reddit community inflated the prices of these stocks by up to 100 times in a matter of months. A Reddit community joked in January 2021 about inflating the price of DOGE to establish a crypto counterpart to GME. The DOGE price rose as a result of the trend, which was aided by Tesla CEO Elon Musk’s tweets. Dogecoin has reached a new all-time high of $0.73 USD after gaining nearly 2,000 percent in just five days.
Elon Musk
However, in May 2021, Elon Musk made a public joke about DOGE on TV, and many believe this was the catalyst for the subsequent price decline. Several traders subsequently moved on to other meme coins, such as SHIB, the “Dogecoin killer.” Simultaneously, ordinary investors FOMOed into meme coins in the hopes of becoming billionaires overnight, resulting in yet another meme coin rise.
Meme coins are also appealing to retail investors since they often cost only a few cents or even a fraction of a cent. Technically, the low price is meaningless due to the large supply of these coins. Still, possessing millions of a certain meme coin versus a fraction of ETH or BTC feels different. With just a few bucks, traders can get thousands, if not millions, of DOGE, SHIB, or Akita Inu (AKITA) tokens.
Aside from the potential rewards, the meme currency craze is also fueled by the sentiments of particular communities. Meme coins, as previously said, are inspired by popular Internet memes, are intended to be amusing, and are sometimes regarded as an “insider joke” for a group. In some ways, purchasing meme coins is a method of expressing support for their unique communities. Following the GME stock market saga, meme currency traders inspired by the Reddit group SatoshiStreetBets wagered against major cryptocurrencies in a “David vs. Goliath” struggle. As a result, the crypto market would be saturated with community-driven meme coins by 2021.
Investing in meme coins has the potential to be risky.
Meme coins may have experienced exponential growth in 2021, but trading and investing in meme coins, like other cryptocurrencies, has a significant level of financial risk.
To begin with, the tokenomics of meme currencies can be problematic. As an example, consider Bitcoin. It has a deflationary character, a blockchain, a well-written whitepaper, and an established ecosystem. In recent years, we’ve seen greater institutional acceptance of bitcoin. Most meme coins, unlike BTC, are inflationary and have no limit on supply. Their ecosystem, application cases, and basics are frequently established by the community’s collective jokes. Only a handful of meme coins were created using significant cryptocurrency technology. DOGE, for example, is based on the Litecoin (LTC) blockchain, while SHIB is based on the Ethereum blockchain.
Another concern is that meme coins are primarily community-driven and more speculative than cryptocurrencies with higher market capitalizations. This volatility frequently results in unanticipated pump and dump situations. Meme coins have a rather brief life cycle. Their value might skyrocket due to celebrity endorsements or FOMO, or plummet when the community decides to move on to the next meme currency.
As the meme coin market grows, you should be cautious that some projects may try to take advantage of the enthusiasm to defraud traders. For example, Squid Game (SQUID), a meme coin based on the hit Netflix show of the same name, grew by more than 86,000 percent in just one week. The development team, on the other hand, abruptly rug-pulled, causing the price to collapse by 99 percent. Worse, holders were prohibited from selling their SQUID tokens. As a result, before trading or investing in meme coins, you should always be cautious and DYOR.
A rundown of the most popular meme coins
Dogecoin (DOGE) and Shiba Inu (SHIBA) have the greatest market capitalisation in the meme currency market (SHIB). Following the popularity of DOGE and SHIB, a slew of dog-themed meme coins flooded the market in the second half of 2021, gaining traction.
Dogecoin is a cryptocurrency created by Dogecoin (DOGE).
Dogecoin (DOGE) was founded in 2013 by Billy Markus and Jackson Palmer, software programmers. It was designed as a joke cryptocurrency to grab mainstream attention and was inspired by a Shiba Inu dog meme. Doge is a fork of Litecoin (LTC) that uses the same Proof of Work (POW) process and has no supply limit. Check out What Is Dogecoin? for a more in-depth look at DOGE.
Shiba Inu (SHIB) is a Japanese dog breed.
Shiba Inus (SHIB) is DOGE’s main competitor and is known as the “Dogecoin killer.” Shib was inspired by a Japanese dog breed. It was made in August 2020 by an unnamed developer named Ryoshi. The primary difference between DOGE and SHIB is that the latter has a limited supply of one quadrillion tokens, 50% of which were burned and donated to charity. A decentralised exchange, an NFT art incubator, NFTs, and an NFT game are all part of SHIB’s ecosystem.
Mars, Dogelon (ELON)
In terms of popularity, Dogelon Mars (ELON) is right behind the canine duo. ELON is named after Tesla CEO Elon Musk and his passion for his firm, SpaceX, as the name suggests. ELON is a fork of Dogecoin with a 557 trillion token circulating supply. ELON has grown by more than 3,780 percent since its inception in April 2021, as of November 2021.
Akita Inu is a Japanese breed of dog (AKITA).
Other meme coins with Japanese dog breeds as mascots include Akita Inu (AKITA), Kishu Inu (KISHU), and Floki Inu (FLOKI) (FLOKI). DOGE had a big influence on AKITA. In February 2021, it was released as an ERC-20 token on Uniswap. SHIB’s tokenomics are extremely comparable to this one. The AKITA team, like SHIB’s developer Ryoshi, locked half of its total supply on Uniswap and sent the other half to Ethereum co-founder Vitalik Buterin. AKITA, on the other hand, has a total quantity of 100 trillion tokens, which is less than a tenth of the total supply of SHIB. In May 2021, AKITA gained traction alongside its brother doggie coins and was dubbed a “Dogecoin killer” by some members of the community.
Samoyedcoin is a cryptocurrency created by Samoyed (SAMO).
Samoyedcoin (SAMO) is a Solana blockchain-based dog meme coin project. At the time of debut, 13% of SAMO’s supply was airdropped to community members. SAMO’s plan includes burning events, airdrop tools, a decentralised exchange (DEX), and the construction of NFTs, according to their website. Due to a recent price surge, Samoyedcoin has acquired a lot of traction. Within a month, SAMO’s had grown by nearly 4,300 percent. In just around 30 days in October 2021, the price jumped from $0.005 to almost $0.22.
Kishu Inu is a Japanese dog breed (Kishu).
Since its inception in April 2021, Kishu Inu (KISHU), another canine-themed meme coin, has risen at an exponential rate. KISHU provides prizes for active users, non-fungible tokens (NFTs), and a decentralised exchange (DEX) called Kishu Swap.It has grown in popularity, with over 100,000 holders and a market capitalization of $2 billion just one month after its inception.
MoonSafe (SAFEMOON)
SafeMoon was another newbie that took advantage of the rally (SAFEMOON). It is a BEP-20 coin that was introduced in March 2021 on the Binance Smart Chain (BSC). It compensated for long-term holders by imposing a 10% exit fee on those who sell the token, half of which will be handed to current SAFEMOON holders and the other half will be burned. After soaring in April, it drew the interest of individual investors. It has a 9418.54 percent ROI as of November 2021, according to CoinMarketCap.
Conclusion
With more meme coins joining the market every day and traders seeking to emulate DOGE and SHIB’s earnings, it’s critical to DYOR before investing in any meme coins. Keep in mind that, in comparison to other digital currencies, meme coins are quite volatile. Investing in or trading cryptocurrencies carries a high level of risk. Because meme currencies are heavily influenced by the community and might crash at any time, you should never invest money you can’t afford to lose.
