Investor’s Guide to Memecoins

2013 was the first cryptocurrency boom.

Bitcoin started the year at around $13 and surged to $1,100 in December. In response, many entrepreneurs began launching alternatives to Bitcoin: Litecoin, Ripple, and Peercoin, and their “altcoins” quickly earned millions of dollars.

In the midst of all this madness, the two men started telling the world’s worthiest joke.

Billy Markus was a software engineer at IBM and Jackson Palmer was a developer at Adobe. Since both of these new altcoins were based on open source code, it was a simple matter for the two to release their own version of Litecoin, tweak a few variables, and call it Dogecoin.

It was a parody of everything happening in cryptocurrency. It was a useless token with a ridiculous Doge meme as its mascot.

But the joke was on them. People started buying DOGE, with the token running nearly worthless from $0.00026 to $0.00095. Billions of Dogecoins were being traded every day. Within a month of launch, Dogecoin briefly traded more than all other cryptocurrencies combined.

Today, their parody coin would have a real market capitalization of $21 billion, making it the most valuable joke in the world.

Two words: Stay away.

Of course, there are half a million memecoins today, all trying to replicate Dogecoin’s success. Typically, they start trading with very small amounts, like Dogecoin. Even experienced investors may be tempted to buy meme-themed coins in large quantities.

But our investment strategy can be summarized in two words. stay away.

Memecoin is like a penny stock. Even small price fluctuations can make you feel rich. “All I need is for the price to double.” What drives Memecoin is:

• fear of missing out: When you look at the latest memecoin rises, such as Solana’s surge this year, it’s tempting to want to make a quick buck.
• the temptation of perfume: Memes are hardwired into our brains (that’s why they’re memes). If you see a meme that’s familiar or funny, you’re essentially giving a user-friendly face to a useless token.
• The charm of community: For Memecoin to spread, there must be an online community, and these forums can become echo chambers that fool you into thinking the coin has real value.
• the thrill of gambling: It’s great to know that your investment can not just double or triple, but 1000x. A lot of time and money is wasted this way.

Do people make money with memecoins? always. But people also make money at gambling establishments. Investing in MEMCOIN is a gamble.

Stay away.

Memecoin does not create value

Our Investment Approach: Cryptocurrency is like a companyand Tokens are like stocks. (See more details here.)

We invest in companies that provide useful products or services. Tesla makes cars. Apple makes computers. Starbucks makes coffee. These companies produce value (transportation, productivity, caffeine) that moves society forward.

We invest in things that create value.

We also call this ‘value investing’. It involves finding a valuable company and holding its stock for the long term. (Crypto value investing works the same way, except you buy and hold tokens.)

Memecoin does not create value.. No product, no service. They are not trying to create anything useful or change the world in any meaningful way. they don’t try do Anything… Other than making money quickly.

Some people argue that memecoins provide entertainment, just as the gambling industry claims that they provide entertainment. This proves the point: Memecoins = gambling.

Investing, on the other hand, is fundamentally different from gambling.

• gambling We are wasting our money on a game that is rigged so that we will lose in the long run.
• invest You are investing your money in worthy businesses that you believe will succeed in the long term.

Memecoin is a gambling casino cleverly disguised with a cute and funny mascot. Stay away.

Memecoins Fund Blockchain

So while memecoins have no place in a smart investor’s portfolio, they do play one useful role. move money.

Take Solana as an example, which is faster and cheaper than Ethereum. In 2024, there was an explosion of memecoins on the chain. Someone even created a project that allows users to easily spin their memecoins with just a few clicks, resulting in 500,000 new memecoins this year. .

All of this money flowing into Solana provides positive benefits to the blockchain itself. Increased network activity leads to higher transaction fees and improved network security.

Solana’s visibility has also been improved. More users lead to more developers, which leads to more useful projects. And there are more news articles about Solana.

So you could say that memecoins aren’t good for retail investors, but they could be good for moving “dumb money” into places where it can be used for smart projects.

But do you really want to build a blockchain based on gambling?

The stink of Memecoins

When the gambling industry tries to move to a new city, they always use the same argument. Gambling creates jobs.

It’s true. Every gambler needs food, accommodation and nightclubs. And the casino itself needs cocktail waitresses and pit bosses. Just as Memecoin builds blockchain, gambling creates jobs.

But once the stench of gambling enters a community, it never goes away. I believe the same is true for blockchains built on memecoins.

The initial user base is there to gamble, not to create value, making it difficult to convert to actual value creation. The community and culture are already built around casinos.

So, while memecoins are tempting not only for investors but also for the blockchain itself, it is a devil’s bargain, as is the community trying to start its growth by attracting gambling venues. Ultimately, what kind of citizens are you trying to attract?

It’s difficult to wash away the odor of a wet dog.

Two words: Stay away.

Memecoin is tempting because it taps into the monkey part of our brain. Dogs and cats, proverbs and the thrill of gambling – it’s a powerful cocktail that can help you lose money.

We always say “this is not investment advice,” but that’s rarely the case. is Investment advice: Stay away from memecoins.

Memecoin Investor Implications:

• Stay away.
• Stay away.
• Stay away.