Meme Coin Season: Trends, Hot Coins and Risks
"Meme coin" is a term in the cryptocurrency world that refers to tokens solely backed by an online community of followers and traders. In this article, we talk about trend coins and the history of the phenomenon.
A decade ago, two programmers made a playful decision to create an "entertaining and amicable internet currency." Their purpose was to demonstrate the exaggerated practicality of crypto coins to the community and to mock the growing hype surrounding them at the time. Little did they know that their "doge" coin, inspired by a popular meme, would be the progenitor of an entire category of cryptocurrencies known as meme coins.
According to CoinMarketCap, more than 150 distinct meme coins are actively traded in the cryptocurrency market, although the total number surpasses 400 according to the most conservative estimates.
While most of these coins have long lost their value and been forgotten by the community, the collective market capitalization of meme coins amounts to approximately $17 billion.
Source and Copyright: © CoinMarketCap
What are Meme Coins?
"Meme coin" is a term in the cryptocurrency world that refers to tokens solely backed by an online community of followers and traders. Simply put — they are based on hype and not on utility.
These coins are generally associated with well-known memes such as Doge, PEPE, Chad, etc. While meme coins can be amusing and occasionally yield substantial profits, they are considered risky investments primarily due to their lack of intrinsic value.
Unlike Ethereum and other utility cryptocurrencies, meme coins primarily function as trading instruments. Consequently, their price is determined solely by the value attributed to them by their respective communities.
Why Do People Invest in Meme Coins?
Some individuals invest in meme coins purely for entertainment purposes, while others are solely motivated by potential financial gains. Furthermore, meme coins have witnessed remarkable surges in value during past meme coin seasons, and numerous success stories exist of individuals becoming "meme coin millionaires". At the same time, many people have lost their money by investing in such coins.
What is Meme Coin Season?
In the context of cryptocurrencies, the term "season" generally denotes a period when a particular type of cryptocurrency or market trend experiences heightened interest and activity. For instance, "altcoin season" refers to a period in which alternative cryptocurrencies (altcoins) perform well in the market compared to established currencies like Bitcoin.
This concept is somewhat similar to conventional terms such as "bull season," which signifies a period of rising prices and optimistic market sentiment, or "bear season," which denotes the time of falling quotes and pessimistic market sentiment.
However, the term "meme coin season" is relatively new. It pertains to a timeframe during which meme coins or other cryptocurrencies with a strong presence on social media platforms witness increased activity and a surge in popularity and hype.
Doge the Pioneer
During a meme coin season, this cryptocurrencies can experience extraordinary gains as their surrounding communities generate hype and promote them online. A notable example of the most recent meme coin season occurred in 2021 when Dogecoin witnessed massive surges in value.
Source and Copyright: © TradingView
Around the same time, other prominent coins like Shiba Inu also observed significant gains as investors enthusiastically embraced the meme coin craze.
Source and Copyright: © TradingView
Now let’s examine a few examples of meme coins that have experienced significant price rallies in 2023.
Hype Meme Coins of 2023
$PEPE
Just a month ago, on April 17th, the PEPE token was barely visible on the price charts, lurking around at a measly $0.00000002764. But on May 5th, it burst through the roof, hitting an all-time high of $0.000004354. That's an astonishing increase of nearly 16,000%.
Source and Copyright: © TradingView
Now this token is traded on Binance, OKX, and other top exchanges. Its market cap even hit $1.6 billion.
$WOJAK
Now, let's turn our attention to another notable contender in the meme coin space—the WOJAK token.
Imagine this: several weeks ago, the WOJAK token was struggling in the depths of the market, barely managing to maintain a value of $0.0000488. On May 5th, it skyrocketed to new heights, reaching an astounding peak of $0.001084! This represents an incredible surge of approximately 2,200%.
Source and Copyright: © CoinMarketCap
$LADYS
On May 11th, Milady (LADYS), a meme coin associated with an anime avatar NFT collection, grew by 5,250% in 24 hours, reaching a value of $0.0000001528. The pump was attributed to a meme tweet by Elon Musk featuring a Milady NFT, boosting the collection's sales.
Source and Copyright: © CoinMarketCap
Developers clarified that LADYS has no affiliation with the creator of Milady or Milady Maker but pays tribute to the NFT collection. Despite being deemed useless and for entertainment, investors saw value in LADYS. Its diluted market cap exceeded $140 million, with a trading volume of $230 million.
Future Opportunities
Miles Deutscher, a popular Twitter crypto blogger, shared tools for finding alternatives to $PEPE (375,000x).
Here's what he suggests:
- Use DexTools to track emerging meme coins gaining traction.
- Utilize LunarCrush to monitor socially active project communities.
- Verify contracts with TokenSniffer to avoid blatant scams.
- Explore project holders using BubbleMaps.
- Keep an eye on smart money through DeBank.
These tools can assist in discovering alternative meme coins and navigating the dynamic cryptocurrency landscape.
Disclaimer. Not financial advice. We warn that buying meme-coins can result in losing your money. Do your own research and don't risk funds you can't afford to lose.
Should You Invest in Meme Coins?
In a Forbes Advisor interview, Jonathan Zeppettini, the Head of International Operations at Decred, made a significant observation about the forgotten peers of Dogecoin from the years 2013-2014. These coins, which no longer trade and have caused substantial losses for speculators, serve as a cautionary tale.
The essence of investing in meme cryptocurrencies revolves around this idea. Meme coins often emerge soon after the release of a viral meme that captures the community's attention. Their primary objective is to capitalize on the fear of missing out (FOMO).
Consequently, meme coins are often derogatorily called "shit coins," created predominantly for fraud. This raises doubts about the viability of investing in such coins.
Nevertheless, some meme coins manage to develop vibrant communities and extensive ecosystems, transforming themselves into potential investment opportunities. Additionally, meme coins are uniquely intertwined with public sentiment and cultural trends, heavily influencing their value through hype.
However, it is important to note that this influence is not always positive. For instance, Elon Musk's tweet discouraging investment in Dogecoin solely for curiosity purposes caused an instant collapse in DOGE's price.
Conversely, when Mark Zuckerberg shared a photo of his pet goats with the caption "My Goats: Max and Bitcoin," the Aqua Goat meme coin (AQUAGOAT) experienced a 300% surge in value.
To conclude, meme coins can be worthwhile investments if the investor is willing to closely monitor public sentiment and actively contribute to shaping positive perceptions of the token. Judging by the daily trading volume of meme coins, which exceeds $1.5 billion, it is undeniable that this category of cryptocurrencies holds promise for the future. However, it should not be forgotten that meme-coins have no long-term value and carry the risk of financial loss.
About the author
Roman Kondratiev
Hey there, I'm Roman. I am an all-rounder with experience as a blockchain developer, Web3 copywriter, creative producer, & social media expert.
