Oh so you thought a cryptocurrency actually had to innovate and work hard for years to reach the top 100? Well, think again.
Welcome to the world of meme coins - cryptocurrencies who's main value proposition is a die-hard community and a cute logo.
The first meme coin to gain real traction was Dogecoin (Doge), which was essentially a copy of Bitcoin's source code with a cute photo of a dog plastered on it.
Originally created to mock the rise of cryptocurrencies like Bitcoin, Elon Must joked about Doge ad nauseam on Twitter, causing people to think that it may eventually be accepted for Twitter and Telsa payments.
The value of Doge skyrocketed over the years from a market cap of 30 million dollars to 13 billion dollars today, or about 2% the entire value of Bitcoin.
Most recent meme coin on the scene is a token called BONK in the Solana ecosystem. It was airdropped to user wallets who participated in early Solana NFT projects.
Over the past two months the market cap of Bonk has climbed from 10 million dollars to over a billion. Some of these early airdrops are now worth thousands of dollars.
In between Doge and Bonk we've had hundreds, if not thousands, of meme coins come on the scene. Most have failed, but some have achieved impressive market valuations.
Shiba Inu (Shib), is another notable success story that was built on the Ethereum blockchain as an ERC-20 token. It is currently ranked #17 among all cryptocurrencies.
Why do these meme coins have value? Community, community, community, and viral marketing. When it comes to speculative frenzies, a strong community is more important than the actual security or innovation of the project.
These coins gain traction on social media such as Twitter, Discord and even TikTok, the value skyrockets as people pile in, and it eventually crashes when the whales sell. Nevertheless a die-hard community remains, and the coin manages to stay in the top 50.
Now we have thousands of speculators (degens) betting on which meme coin will be the next to increase 100 or 1000 times its current value. The question is, do any of these meme coins actually have a sustainable future?
The fact that dogecoin has maintained a market cap of 10 billion for nearly three years tells us that yes, at least in the medium-term, these tokens can remain valuable for some time.
But in the long run though, cryptocurrencies are here to change finance, big tech, energy, and more. Once cryptocurrencies actually allow people to participate in the new economy become mainstream, these meme tokens could lose their appeal.
What do you think? Will these meme coins still be valuable a decade from now, or is it just a speculative phase?
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