AMP Raider Reveals New Case Study On Community-Driven Meme Coins

Apr 6, 2022

AMP Raider revealed their new case study on a community-driven phenomenon, a form of expression for millennials and the Gen Z generation.

AMP Raider Reveals New Case Study On Community-Driven Meme Coins

Meme coins are devoid of fundamentals. Meme coins were not designed with a particular use or inherent value. They are more of a community-driven phenomenon, a form of expression for millennials and the Gen Z generation.

What are meme coins?

Meme coins are cryptocurrencies inspired by memes or jokes on the Internet and social media. The first meme coin created was launched in 2013 as a parody, DOGE was inspired by the popular Doge meme of a Japanese Shiba Inu dog.

Meme coins tend to be highly volatile. They are mainly community-driven and can gain popularity overnight due to online community endorsements and FOMO.

Another characteristic of meme coins is that they often have a vast or unlimited supply.

What Makes Meme Unique?

Perhaps MEME’s most recognizable unique feature is its lack of utility — it exists purely for investors to perform classic DeFi activities, and there is no project behind it to give it innate worth.

However, as with any meme, its popularity has become viral, and interaction has only increased. Intrinsic value, as such, is not a genuine consideration for investors.

The appeal of such a satirical project is likely heightened for DeFi investors who have grown used to earning passive income from tokens via yield farming and liquidity mining, regardless of what the tokens themselves are used for.

Why are meme coins so popular?

The crypto market grew as retail investors wanted to hedge against inflation. Meme coins also boomed amidst the hype, growing in market capitalization and variety.

It all started after the “meme stock” saga of GameStop (GME) and AMC Entertainment (AMC) in late 2020, where the Reddit community pumped up the prices of these shares to as much as 100 times in a few months. In January 2021, a Reddit group joked about pumping up the price of DOGE to create a crypto equivalent of GME. The trend caught on, and along with the influence of Tesla CEO Elon Musk’s tweets, DOGE price rallied.

However, in May 2021, Elon Musk joked about DOGE publicly on TV, and many say it was the cause of the next price drop. Several traders then turned to other meme coins on the market, such as the “Dogecoin killer” SHIB. At the same time, retail investors were FOMOing into meme coins hoping to become millionaires overnight.

Another reason retail investors find meme coins attractive is that they typically only cost a few cents or even a fraction of a cent. Technically, the low price doesn’t mean much because these coins have huge supplies. With just a few dollars, traders can get thousands or even millions of DOGE, SHIB, or Akita Inu (AKITA) tokens. Still, holding millions of a specific meme coin feels different than owning a fraction of ETH or BTC.

Apart from the potential profits, the meme coin frenzy is also driven by their respective community sentiments. Meme coins are inspired by popular Internet memes, intended to be fun, and sometimes considered an “insider joke” for a community.

Buying meme coins, in a way, is showing support for their respective community. Following the GME stock market saga, meme coin traders inspired by the Reddit group SatoshiStreetBets started a “David vs. Goliath” battle to bet against the mainstream cryptocurrencies.

Where to invest in meme coins

Meme coins might have seen exponential growth in 2021, but like all cryptocurrencies, trading and investing in meme coins carries high financial risk.

First of all, the tokenomics of meme coins can be concerning.

The collective jokes of the community often define their ecosystem, use cases, and fundamentals. Most meme coins are inflationary with no maximum supply. Only a few meme coins were built on the technology of major cryptocurrencies. For example, DOGE’s technology was derived from Litecoin (LTC), and SHIB was built on the Ethereum blockchain.

Another potential risk is that meme coins are heavily community-driven and speculative. This volatility constantly leads to unexpected pumps and dumps.

The lifecycle of meme coins is generally short-lived. Their prices can rocket thousands of times from celebrity shilling or FOMO or crash unexpectedly when the community decides to move on to the next meme coin.

As the meme coin market grows, know that there might be projects taking advantage of the hype to scam traders.

Therefore, always be careful and DYOR before trading or investing in meme coins.

Market Position

According to CoinGecko, Dogecoin, which originated in 2013 as a joke, ranks No. 10 with a market value of over $35 billion. At the same time, rival token Shiba Inu, which was started in 2020 by an anonymous person known as ‘Ryoshi’ to poke fun at Dogecoin, ranks No.9 with over $38 billion. Also, Shiba Inu (the supporting community calls it the “Dogecoin killer”) hit an all-time high of $0.00008616 per token on October 26, 2021.

How Are Meme Coins Different From Mainstream Cryptocurrencies?

Mainstream cryptocurrencies such as Bitcoin have been created with specific technology to boost trading and transaction in the crypto market. In contrast, meme coins were not designed with a particular use or inherent value. “Meme coins are devoid of fundamentals. They are more of a community-driven phenomenon, a form of expression for millennials and the Gen Z generation. Meme coin investing isn’t bereft of associated risks and rewards. It has all the bells and whistles of reckless gambling.

Volatile Nature

Meme coins are highly community-driven. Their performance and fame are mostly linked to social media support and hype created by influencers. Volatility is always a significant concern in cryptocurrency, and these meme coins are even more volatile than mainstream crypto tokens.

Dogecoin mania is driven entirely by Musk’s whims and fancies. Shiba Inu is touted as the ‘Dogecoin Killer’ by Shiba Army fans. The price duel between these two dog-themed coins is nothing more than a fun spectacle.

Are meme coins here to stay? Meme coins may become mainstream or die a sudden death as soon as another spectacle catches everyone’s fancy.

For more information

https://ampraider.com/highly-volatile-meme-coins-inspired-by-crypto-jokes-on-social-media-and-the-internet-create-coin-frenzy/

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