‘Memeification’ of crypto: Will meme-based cryptocurrencies ever be taken seriously?
Some of the best performing meme coins in 2024 so far include Pepe, Tamadoge, and Floki
Dubai: Though cryptocurrencies have been around for more than a decade, they are still capturing headlines – more so in 2024 than any other year. One of the reasons being how several meme-based cryptocurrencies, commonly referred to as meme coins, have made incredible gains in recent years.
Although the internet culture has long been synonymous with memes, 2021 saw the emergence of meme investing in the world of cryptocurrency. So even though they’re created for fun, when meme coins grip the imagination of the crypto community, they can garner big support and make massive market gains.
“While many meme coins come and go quickly, some have made a significant impact on crypto culture and become valuable investments,” Akhbar Kharbekh, a UAE-based cryptocurrency analyst, explained. “The last few years evidently shaped the trend of what is now known as the ‘memeification’ of cryptocurrencies.
“And for crypto traders and investors, finding the best performing meme coins can mean the drastic difference between a portfolio in the red [losses] or the green [gains]. However, many will continue to gain meme coin status like Dogecoin, Shiba Inu, Pepe, Tamadoge, Floki, among many others.”
Memes led to Dogecoin; copycats followed
With crypto incredibly volatile, as evidenced in the wild fluctuations seen during the past year, unpredictability comes as second nature to meme coins. For instance, the world-famous Dogecoin was created in 2013 as a joke, but its popularity catapulted in 2021.
While meme-based currencies like Dogecoin have gained a massive following over the years, it also prompted several copycat versions, like Dogecoin-derivatives Shiba Inu, Dogelon Mars, and Doge Dash. Though they are often created as jokes, these coins can go mainstream.
Dogecoin, for example, had a huge spike in value in May 2021 before levelling off, and is currently ranked tenth in market value. Still, their individual value is never very high – Dogecoin is currently worth about $0.14 (55 fils) per coin. But entering 2024, experts predicted that meme coins will have a further eventful year. Cryptocurrencies besides Shiba Inu and Dogecoin that are driven by online memes and jokes are expected to take centrestage and record massive surges this year.
Will the meme trend continue in 2024, 2025?
With increased global adoption and more involvement by retail traders, meme currencies like Dogecoin will remain attractive to speculators due to their cheap price, accessibility, and huge potential gains due to aggressive volatility, opined Kharbekh.
“On the other hand, Bitcoin, Ethereum, and other major high-value cryptocurrencies will be targeted by institutional investors, funds, and exchange-traded funds (ETFs), further solidifying their position as an accepted alternative asset class,” he added.
“Unlike other cryptocurrencies, which try to serve a real-world purpose, the point of most meme coins isn’t really to do anything. Instead, they’re largely vehicles for speculation, their value driven by hype. Meme coins generally begin at a price of a few cents or less but can quickly soar to hysterical highs.”
Why has meme investing become so popular?
While traditional cryptocurrencies are created as a means of solving real-world problems and to carry a degree of utility for users, whether that utility is privacy, borderless transactions, or acting as a native currency to projects, meme coins, however, are created with no such utility.
“Meme coins simply exist as a cryptocurrency that’s attached to a meme,” said Brian Deshell, a UAE-based cryptocurrency trader and analyst. So, with this in mind, why are investors flocking to buy into assets that have no fundamentals?
“It’s likely because investors discovered the power of community when investing in assets. Although meme coins were created without much functionality, this isn’t to say that they don’t possess the potential to outperform the likes of Bitcoin and Ethereum in certain ways.”
Notably, the circulating supply of coins like Shiba Inu and Dogecoin, at over 500 trillion and 100 billion respectively, means that they could become more practical for daily payments due to their lack of scarcity compared to Bitcoin’s far more limited capped supply of 21 million coins, for instance.
Some people have also created viral cryptocurrencies to scam people out of money. Many meme coins also aren’t backed by the same technology as established cryptocurrencies like Bitcoin, nor do they have any established ecosystem to support them.
“Of the meme coins that are currently popular, only two uses tested blockchains: Dogecoin’s protocol is based on cryptocurrency Litecoin, and Shiba Inu was built on the Ethereum blockchain. Most of them are also largely valueless outside the cryptocurrency world,” added Dunn.
“Additionally, no one accepts them as a form of payment for goods and services, though some still accept Bitcoin. Because of their topical nature, it’s unlikely that most of the meme coins being created will still be around in a couple of years. Even if they are, their value will probably be next to zero.”
Meme coins or not, crypto to stay volatile in 2024
Kharbekh said it is expected that 2024 and 2025 will be shaped by further regulatory decisions on cryptocurrencies. “Central bank decisions will bring volatility to investment markets, including cryptocurrencies,” he added, which includes meme coins, among several others.
“Excessive and complicated regulations, and the complete lack thereof, can open the door to unregulated and unethical activities in the crypto world. The best-case scenario is regulatory collaboration to craft sound regulations, and we believe this will happen sooner rather than later.
“The acceptance of cryptocurrencies as a disruptive digital asset will continue to grow, paving the way for institutional investors to ramp up their investments in crypto assets. Further, we expect the crypto trend to continue in the coming years and see high demand for cryptocurrencies.”
Verdict: Meme coins – to invest or not to invest?
While it is possible to make money investing in meme coins, both Kharbekh and Deshell agree that they are “never a sure thing”. “Meme-based cryptocurrencies are even more volatile than their mainstream counterparts and can plummet in value overnight,” added Deshell.
“Meme coin or not, even the most hyped cryptocurrency could end up being a scam in the end. Once it gets popular and spikes in value, retail investors sometimes jump on board and further boost the coin. Prominent online figures and celebrities also drive up the popularity of certain meme coins.
“While reasons be aplenty that make meme coins a popular choice, they should be part of a more varied portfolio, and typically only get allocated minimal savings. Do your own research when trying to find the best performing meme coins in 2024. And never risk more capital than you can afford to lose.”