Meme coins are digital currencies that get their inspiration from Internet and social media jokes and memes. Dogecoin (DOGE) was the initial meme coin produced. A Japanese Shiba Inu dog meme known as Doge served as the basis for the 2013 parody DOGE.
Meme currencies frequently exhibit considerable volatility. They are primarily driven by the community and can become well-known over night as a result of FOMO and online community recommendations. However, when investors start looking at the next meme coin, their price may suddenly drop.
Another characteristic of meme money is that their supply is either enormous or limitless. While DOGE has no maximum supply and over 100 billion tokens are already in circulation, Shiba Inu (SHIB) has a total quantity of 1 quadrillion tokens. Since meme tokens typically lack a coin-burning mechanism, their abundant supply accounts for their comparatively low values. Millions of meme tokens can be purchased for just $1 USD.
While it's difficult to pinpoint particular causes, some claim that the COVID-19 pandemic saw a rise in the cryptocurrency market as retail investors sought to protect themselves against inflation. During the euphoria, meme coins also experienced a surge, increasing in both market capitalization and variety.
It all began after the GameStop (GME) and AMC Entertainment (AMC) "meme stock" incident in late 2020, in which the Reddit community drove up the prices of these shares by as much as 100 times in a short period of time. A Reddit user made light of the idea of inflating the price of DOGE to turn it into the cryptocurrency version of GME in January 2021. Elon Musk, the CEO of Tesla, also had an impact on the trend, which caused the DOGE price to increase. Dogecoin increased by more than 2,000% in just five days, reaching a new all-time high of $0.73 USD.
However, Elon Musk publicly made fun of DOGE on television in May 2021, and many believe this was the reason for the subsequent price decline. The "Dogecoin killer" SHIB was one of the other meme coins that traders later switched to. Retail investors FOMOed into meme coins at the same time in the hopes of becoming billionaires overnight, causing yet another meme coin rally.
The fact that meme coins often only cost a few cents or even a fraction of a penny is another factor that makes them appealing to retail investors. Technically, the low price is meaningless because there is a massive supply of these coins. Even Nevertheless, possessing millions of a particular meme coin feels different than possessing a tiny amount of ETH or BTC. With just a few bucks, traders can purchase thousands or even millions of DOGE, SHIB, or Akita Inu (AKITA) tokens.
In addition to the potential profits, each community's sentiments are what fuel the meme coin fever. Meme coins, as previously said, are intended to be humorous and occasionally regarded as a "inside joke" for a group. They are inspired by well-known Internet memes. In a manner, purchasing meme coins is a means to assist the associated community. Following the GME stock market drama, meme coin traders were motivated by the Reddit group SatoshiStreetBets to wage war against the established cryptocurrencies in a "David vs. Goliath" conflict. Community-driven meme coins were therefore abundant on the crypto market in 2021 till date.
I know MEME COINS for the first time.
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Thank you so much for sharing a valuable information about meme coin.
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