The global adoption of cryptocurrency points toward a dream of a more decentralized and fair society, a reality that might materialize within a generation. However, not all crypto developers are driven by such altruistic ambitions. Some simply want to have fun—this is how meme coins, or crypto memes, are born. Before exploring how to buy your first meme coin, let's first understand what they are.
Understanding Meme Coins
Meme coins are cryptocurrencies essentially created as jokes. This concept inspired the creation of Dogecoin (DOGE). Given the substantial returns DOGE provided to its early investors, numerous similar meme coins emerged, often driven by the desire for high yields rather than humor.
Some meme coins operate on their own blockchains, powered by decentralized networks. Others function as tokens on established networks, such as ERC-20 tokens on Ethereum.
Dogecoin: The Original Meme Coin
Dogecoin was the first meme coin ever created. Software developers Billy Markus and Jackson Palmer launched its mainnet in 2013 as a fork of Litecoin. Markus drew inspiration from a popular Shiba Inu dog meme online, and Palmer helped him develop the idea into a viable cryptocurrency.
By late 2013, Dogecoin traded around $0.0003–$0.0007 on crypto exchanges. It first surpassed $0.001 in early 2014 but took over four years to break $0.01 by mid-2018. In May 2021, it briefly reached approximately $0.74 per coin—a return of over 1000x from its early-2014 levels.
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Why Are Meme Coins So Popular?
There's no single answer to this question. Different investors are drawn to meme coins for various reasons. Many find these cryptocurrencies appealing due to their potential for rapid gains. Leading meme coins like Dogecoin and Shiba Inu have well-documented histories of exponential price increases.
Others appreciate that meme coins represent the playful side of crypto. Some are fans of the meme itself, whether it's a dog or another animal. For these investors, the coin serves as a collectible item.
Risks of Investing in Meme Coins
High Volatility
Meme coins are generally considered to have little utility compared to major cryptocurrencies like Bitcoin and Ethereum. Their value stems primarily from their status as collectibles. Critics argue this means they lack fundamental value.
Consequently, meme coin prices tend to rise and fall with the emotions of their communities and the whims of retail investors. This leads to extreme volatility and unpredictability. Additionally, meme coin distribution is often highly uneven, with a few investors holding substantial market shares, giving them disproportionate influence.
Prices can surge due to Fear Of Missing Out (FOMO), sometimes triggered by celebrity endorsements. For instance, Elon Musk's frequent support of Dogecoin in early 2021 contributed to its 20,000% annual rise.
Tesla will make some merch buyable with Doge & see how it goes
— Elon Musk (@elonmusk) December 14, 2021
Similarly, just as FOMO can drive prices up, panic selling can trigger crashes. Investors who bought at peak FOMO levels often lost nearly all their money. Meme coins can also impact other cryptocurrencies; for example, a coin's price might collapse as investors flock to the newest trendy crypto meme.
Rug Pull Scams
Investors also risk falling victim to rug pull scams. The Squid Game crypto meme, leveraging the popularity of the Netflix show, was a highly publicized example.
🚨Another day, another rug pull🚨
The #SquidGame inspired token #SQUID crashes 99.99% in just 5 minutes today. The project's official website, twitter handle and medium page are no longer functional either.
— Sidhartha Shukla (@s1dc01n.bsky.social) (@sidcoins) November 1, 2021
After its price skyrocketed, the SQUID developers cashed out their tokens and abruptly abandoned the project. SQUID tokens immediately lost almost all value, leaving holders unable to sell.
How to Buy a Meme Coin
Meme coins are easy to purchase on most major crypto exchanges. The process involves just a few steps on user-friendly platforms.
First, set up and verify your exchange account. Log in and navigate to the "Buy Crypto" section. Select "Buy with Card" and choose your desired meme coin. Enter the amount you wish to purchase and your preferred fiat currency. Review the exchange rate and complete the payment. If you haven't already, you may need to provide card details or complete KYC verification.
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Should You Invest in Meme Coins?
For professional or experienced traders, meme coin trading offers the potential for quick gains. This also applies to casual investors. However, meme coin prices can change rapidly, complicating matters for those not constantly monitoring the markets. Thus, casual investors face a higher risk of substantial losses.
Ultimately, the decision to invest in meme coins is personal. If an investor is comfortable owning an asset that can fluctuate wildly in days, that's their choice. However, most casual investors should not invest more than they can afford to lose. Putting all savings into the latest meme coin could lead to wealth or total financial disaster.
Are Meme Coins a Future Asset?
Meme coins have gained significance in recent years, thanks largely to Dogecoin. Today, the focus is on better token utility, with many projects turning to gaming and technical developments to drive adoption.
The future will likely see many more meme coins. However, currently, the established ones dominate the niche and are evolving with more features, potentially changing the nature of crypto memes and creating an interesting future.
Disclaimer: This article is provided for informational purposes only and should not be considered investment advice. Always conduct your own research (DYOR).
Frequently Asked Questions
Where can I buy meme coins?
You can purchase meme coins on a wide range of crypto exchanges. Popular and user-friendly platforms include Coinbase and Binance, where buying meme coins is straightforward.
What exactly are meme coins?
Meme coins, or crypto memes, are cryptocurrencies designed as jokes. Their purpose is fun rather than utility in the crypto space. The most popular meme coins are dog-inspired, with Dogecoin based on a famous Shiba Inu meme from 2013.
How do I find new meme coins?
CoinMarketCap features a "New Cryptocurrencies" section on its website. Scrolling through this menu reveals recently launched meme coins. Remember, many new cryptos carry a high risk of being rug pull scams, like the unfortunate Squid Game token.
Are meme coins easy to acquire?
Well-known meme coins are easily purchased on major crypto exchanges like Binance and Coinbase. Newer meme coins might be harder to obtain, sometimes available only on certain decentralized exchanges.
Which meme coin is the best investment?
This depends entirely on individual opinion and market assessment. Dogecoin is the most established crypto meme, making it the best option for some investors.
Are meme coins a safe investment?
Meme coins are inherently volatile. Investors can achieve high returns but also easily lose almost all their money. It's crucial only to invest funds you can afford to lose.
Why are meme coin prices so low?
The price of a single meme coin token tends to be very low. For a few dollars, investors can sometimes own millions of tokens or more.