Memecoin Casino: Investing and Gambling

Key Takeaways:

• Memecoin is a cryptocurrency that pays homage to internet memes, trends, or viral moments.
• Memecoin is highly volatile, making it a risky investment. They also lack intrinsic value and obvious utility.
• Although memecoins have some similarities to traditional cryptocurrencies, there are some key differences that may prevent them from being used by intelligent investors.

Everyone loves a good joke. This is especially true on the Internet. This love of irreverent humor and community has given rise to a particular form of fun in the cryptocurrency space, a phenomenon called “memecoins.”

In this guide, we’ll cover our approach to memecoins: what they are, why they’re popular, and how some memecoins are making waves with investors.

What is a memecoin?

Memecoin is a type of cryptocurrency inspired by internet memes and trends. They are generally supported by an online community that finds them light-hearted and fun. But for some, it also symbolizes a get-rich-quick scheme.

Unlike Ethereum, Bitcoin, and other cryptocurrencies, memecoins have no real utility or purpose other than cultural value. In most cases, it is only used for speculation or “gambling”. Naturally, this makes them unstable and dangerous.

The rise of meme coins

The birth of MEMCOIN can be directly linked to DOGE.

The first widely known memecoin, Dogecoin (DOGE), was launched as a joke by two software engineers in 2013, inspired by the doge meme (a viral meme of a Shiba Inu, often paired with a relatable caption).

But despite its humorous roots, Dogecoin soon became a cultural phenomenon. This is partly because Elon Musk promoted the coin on Twitter in 2019. In 2021, the coin surged 800% in 24 hours due to interest from Reddit users and encouragement from Elon Musk. Twitter.

Dogecoin is now the world’s largest memecoin, with a market capitalization of over $22 billion. For comparison, that’s larger than the market capitalization of Michael Saylor’s Microstrategy stock.

Other memecoins were launched shortly after the creation of Dogecoin and achieved varying success. Shiba Inu Coin (SHIB), the second largest memecoin by market capitalization, was created in 2020 by an anonymous group/individual under the pseudonym “Ryoshi”.

Today there are half a million memecoins, thanks to a platform that allows users to create new coins with just a few clicks of a button. Naturally, the value of the majority is only a tiny fraction of a penny.

How does Memecoin work?

Humor and internet culture play a big role in shaping the narrative around memecoins. Memecoin leverages the collective consciousness of online communities to leverage the humor and relevance of memes to drive value and adoption.

Therefore, the more the online community can create a buzz around a meme and the memecoin attached to it, the more likely the memecoin will be successful. Often, memecoin’s followers utilize platforms such as Instagram, Reddit, TikTok, and Twitter to generate the buzz necessary for success.

Dogecoin is a prime example of this phenomenon. The accompanying meme was so popular that it was sold as an NFT for a record $4 million. The coin has also received celebrity endorsements from Snoop Dogg, Gene Simmons, and Mark Cuban. They have made Dogecoin a valid payment method for Dallas Mavericks game tickets and merchandise.

Memecoin is a gamble

Even if you are interested in investing some money in memecoin, it is important to understand its volatility before diving in for the humor. Investing in memecoin is a huge financial gamble because the success or failure of memecoin is extremely unpredictable. .

Dogecoin and Shiba Inu are success stories among memecoins, but neither coin has been able to stabilize over a sustained period of time. Additionally, most memecoins fade into oblivion after the initial hype dies down (if there is any hype at all).

Despite the volatility, many people are still attracted to memecoins due to the psychological appeal of a high-risk, high-reward investment and FOMO (fear of missing out).

This is especially true when memecoin price surges occur. This is because it often results in people clamoring to buy coins to participate in the action. However, because prices are so volatile, investors should not buy more than they can afford to risk losing, as prices could easily fall sharply the next day.

What is Memecoin worth noting?

shiba inu: Shiba Inu, launched in 2020, is the second largest memecoin by market capitalization. The coin gained popularity thanks to Twitter support from Elon Musk and Vitalik Buterin. The coin saw its biggest price surge in October 2021, with a price increase of over 300%. However, as you can see in the graph above, this price surge didn’t last long and the value continued to decline over the next two years. As of May 2024, analysts believe the coin’s price could surge again as it mostly moves in tandem with Bitcoin, which is expected to surge. However, due to the extreme volatility of the coin, there is no guarantee that such a surge will occur.

pepe: Launched in April 2023, Pepe is named after the “Pepe the Frog” meme popular in the cryptocurrency community. Initial excitement over the coin’s launch led to a price surge in May 2023. However, soon after the excitement died down, a developer update caused the community to misunderstand it as a security breach, causing many investors to quickly sell their coins, sending the price down. Rapidly.

book of memes: Launched in March 2024, BOOK OF MEME was created as an experimental web3-centric project that combines memes, decentralized storage, degen trading, and gambling. The BOOK OF MEME experiment aims to capture the ever-evolving meme culture in a digital compendium. The project strives to ensure that each part is immortalized on the blockchain. After an initial surge of just over $0.02, the token fell 50% but has maintained its value since then.

Dog We Fat: Launched in November 2023, Dogwifhat is a meme coin operated on the Solana network based on the popular meme of a Shiba Inu wearing a pink hat. memecoin has strong community support and has received endorsements from several celebrities on Twitter. However, despite the current surge, there is no guarantee that prices will continue to soar and may plummet after the initial excitement wears off.

Memecoin Risks and Rewards

Memecoins may offer the allure of quick profits, but the chances of success are extremely low.

Generally speaking, the people who do the best work on memecoins are the creators. If you can get enough traction early on, you can sell your huge allocation for a profit and let others carry the bag. But even creating memecoins is not a good way to get rich. It’s easy to create, but difficult to market and promote considering all the memecoin competition.

The Memecoin market is vulnerable to scams such as pump and dump schemes. In these schemes, groups or individuals artificially inflate coin prices through online marketing and hype to sell their investments at peak prices while others suffer significant losses.

Rug Pulls, a type of scam where creators suddenly abandon a memecoin project and take investor funds, are also common.

There are also cases where scammers use social media to lure investors into buying non-existent tokens. One of these scams occurred in March 2024, when scammers posing as cryptocurrency influencers tricked people into purchasing non-existent BULL tokens.

Memecoin investment strategy

Because the risk is high and the reward potential is low. We do not recommend investing in MEMCOIN. However, if you are willing to take a big gamble or simply want to buy Memcoins to learn about them, please exercise extreme caution before investing.

Plan to thoroughly research your chosen memecoin by looking at its price history, who is behind the coin, whether it appears legitimate, the online community surrounding it, and what may have caused it if it has experienced a crash. (Use our Blockchain Investor Scorecard for your research.)

You may be interested in joining our online community forum for discussion, but take this with a grain of salt. In these forums, you can see many people with a lot of enthusiasm and passion for memecoins, but their predictions about the coin’s success are often just wishful thinking.

Investor Implications

Although Memecoin is mostly fun and games, people have lost a lot of money gambling on it. Some memecoins have generated huge profits and some have stood the test of time, but the vast majority (over 99%) are largely worthless.

If you are considering entering a Memecoin casino and placing a few bets, do not invest more money than you are willing to lose. The hype and excitement surrounding memecoins can be very alluring, and it is all too easy to fall victim to a bad investment or scam.

If you want to take a much safer approach of dollar-cost averaging across high-quality cryptocurrency assets over the long term, check out the Blockchain Believer Portfolio.

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