The Rise of the Meme Coins
Meme-assets have been in vogue for a while now, and most people are familiar with them. Most of us have heard about memestocks like GameStop, but meme coins like Dogecoin differ in a fundamental way. Let’s take a closer look at the rise of the meme coins.
A meme stock is a stock that has seen an increase in volume not because of the company’s performance, but rather because of hype on social media and online forums like Reddit, and more recently, Telegram. For this reason, these stocks often become overvalued, seeing drastic price increases in just a short amount of time. One great example is WallStreetBets group, which helped increase GameStop’s stock value to save the company from bankruptcy. Cryptocurrencies, being born in digital by the digital community, have seen many different meme coins rising up with Dogecoin at the forefront of them all.
But meme coins differ from memestocks in a fundamental way. As economic expert Joe Weisenthal explains:
“When the price of a stock like GameStop goes to the moon, its effect on the actual underlying business of the company (selling video games at shopping malls) is not affected much by it. So you can reasonably talk about the value of the stock being disconnected from the underlying fundamentals.”
On the contrary, there’s no such tension with a memecoin. In fact, it’s arguably the opposite. As a memecoin grows in price, it’s actual fundamental value grows along with it”. It makes the coins more usable.
The most valued meme coins
Dogecoin was founded in 2013, as a way of making fun of alternative coins that were aiming to challenge the monopoly of Bitcoin. However, it is not being viewed as an actual investment by many in the cryptocurrency space. It all started with Redditors, just like Gamestop. Dogecoin’s name is in reference to a popular meme Shiba Inu dog, that popularized phrases such as “much wow”, “very concern” and “such doge”.
As Emily Nicolle reports, in regards to the price: “The coin’s individual price, which was worth around $0.40 as of 8am BST on 20 April, had surged 16% as traders prepared for #DogeDay (20th of April).
Dogecoin has risen more than 8,500% so far in 2021, with a market capitalisation of $51.4bn”.
This means it is now the fifth most valuable cryptocurrency in the world. According to CoinMarketCap:
“In the same way that the GameStop frenzy was pitched as a battle-play of ‘Wall Street versus The Little Guy’, dogecoin is being pitched as a battle-play against the well-established crypto giants like bitcoin”
In terms of adoption, the entrepreneur and owner of the Dallas Mavericks basketball team Mark Cuban recently announced that his team will accept dogecoin as payment for tickets and merchandise.
Cuban said: “For those of you who would like to learn more about dogecoin we strongly encourage you to talk to your teenagers who are on TikTok and ask them about it. They will be able to explain it all to you. We have chosen to do so because sometimes in business you have to do things that are fun, engaging and hopefully generate a lot of PR. So we will take dogecoin, today, tomorrow and possibly forever more”.
“For those of you who would like to learn more about dogecoin we strongly encourage you to talk to your teenagers who are on TikTok and ask them about it. They will be able to explain it all to you.”
Elon Musk also announced that Tesla will be accepting payments in Dogecoin.
Shiba Inu ($SHIBA) is the latest meme currency, which gained 1500% over the past week.
Shiba Inu is meant to be a project that challenges Doge. The creators behind the project sent half of the total supply of the token to Ethereum co-founder Vitalik Buterin wallet “that has grown into an $8 billion portfolio for the creator of the world’s second-largest cryptocurrency. The Shiba Inu holdings in Buterin’s wallet have even surpassed the valuation of Ether held by him”.
In fact, Vitalik Buterin transferred 500 ETH and over 50 trillion SHIB (Shiba Inu), worth around $1.14 billion to the India COVID-Crypto Relief Fund.
This created a world-wide controversy and prompted panic selling amongst investors, contributing to over 35% drop in SHIB’s price.
To Shiba Inu holders relief, Sandeep Nailwal, co-founder of crypto organization Polygon and who put together the Indian relief fund, assured people that “he won’t do anything that hurts any community, especially the retail community involved with SHIB”
Memetic (MEME), also known as PepeCoin, is a peer-to-peer cryptocurrency that was created in 2016.
This coin is based on “Pepe the Frog,” which was first an illustration drawn for an internet comic on MySpace, and then became appropriated for memes associated with the right-wing.
Nyancoin (NYAN) is a coin based on the “Nyan Cat” meme. Five years later this cryptocurrency is still on the market despite its creators suddenly and inexplicably disappearing a couple months after its origin.
“Nyan Cat is an 8-bit animation that was originally posted on the internet in 2011 and features a cherry pop-tart cat flying through space on a rainbow. It was turned into a GIF and then shared and parodied all over the web, beginning with Tumblr. A song titled ‘Nyanyanyanyanyanyanya!’ was eventually added to the background in a YouTube video and that version of the meme gained even more popularity. ‘Nyan’ or ‘nya’ is the Japanese word for meow”.
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