Memecoins, such as Dogecoin, Shiba Inu and Pepe, have become the latest craze in the crypto market.
Meme coins are a type of digital asset that is closely related to internet culture and humor. This type of token has gone viral in the crypto industry in recent years, attracting unprecedented attention and investment from cryptocurrency users, especially among younger ones.
According to CoinMarketCap data, memecoins have a market capitalization of $ 47.200 million dollars, leadered by Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE), Dogewifhat (WIF) y Floki (FLOKI), as the five biggest meme cryptocurrencies today.
The popularity and market growth of memecoins is not only attracting cryptocurrency users and enthusiasts, but has also captured the attention of institutional investors and financial institutions.
Franklin Templeton, a major American investment fund manager, which launched one of the Bitcoin spot ETFs listed in the United States, dedicated a Note from investors to memecoins, highlighting the potential of these digital assets to generate quick profits for their holders. As he explained, although memecoins, in general, have no inherent value or utility, they appear to an attractive option for high-risk investors seeking quick profits through highly speculative assets.
In July 2023, CoinMarketCap published a report on the crypto market, emphasizing that memecoins had become the most popular and attractive sector of the crypto market, even above more established sectors such as DeFi, NFT and Metaverse.
Where does the value of memecoins come from?
Despite the huge popularity of memecoins, many people question their nature, their usefulness and their real value. Therefore, to explain where the current value of memecoins in the market comes from, cryptocurrency researcher and reporter Colin Wu published an article on his blog that delves into the success of these digital currencies.
Wu highlighted several characteristic elements of the most capitalized memecoins on the market, emphasizing their strong user communities.
Culture and humor
First of all, the memecoins with the highest market value, such as Dogecoin and Pepe, have a cultural basis of the Internet solid foundation that has helped boost their popularity. This cultural foundation has also contributed to the recognition and distinction of these memecoins, the researcher explained, making them easy to spread and visually distinguishable from other digital assets.
Wu also pointed out that meme cryptocurrencies carry forward the trait of being inherently humorous and entertaining, so its holders are not only interested in making money, but also in enjoying a relaxed and fun online environment. The researcher considers this feature quite significant, especially, since it has managed to attract a large number of young investors to the cryptocurrency market during the last two bullish cycles.
Creation and participation
Memecoins also offer a low barrier to creation, an attractive feature that allows people to create new related content to express personal ideas or community views. Thanks to this, memecoins are also appreciated as a form of communication and expression within the crypto community.
In this regard, Vitalik Buterin, co-founder of Ethereum, recently highlighted the qualities of meme cryptocurrencies to uplift underprivileged communities and to incentivize project funding and innovation.
Finally, Wu mentioned the Influencer Engagement as a key element of the success of several of the major meme cryptocurrencies on the market. In the case of Dogecoin, the popular Shiba dog memecoin has the backing of Elon Musk, one of the richest men in the world. Musk’s support for DOGE has been such that he has proclaimed himself the “Dogefather.” Matt Furie has also had an active role in its creation, the Pepe The Frog meme, and Ansem in Dogewifhat, promoting and trading with WIF.
Memecoins boost financial inclusion in the crypto world
The characteristics and qualities of memecoins, described by Wu in his report, stand out as key elements by which they have had a significant financial impact within the crypto market and have accelerated financial inclusion in this digital world. The researcher believes that these digital currencies provide a cultural and entertaining element that has been enormously attractive, and that has allowed millions of people to enter the cryptocurrency ecosystem in a simpler and more fun way.
However, despite the qualities of memecoins, these digital assets also pose a high risk for their holders and investors. This is mainly due to the fact that they are speculative and highly volatile assets. The possibility of scams and fraud by unaudited, opaque and non-transparent projects with low liquidity should not be ignored.
IMPORTANT: The content of this article is for informational purposes only and, in no case, what is written here should be taken as investment advice or recommendations. Bit2Me News reminds you that before making any investment you should educate yourself and know where you invest your money, as well as the pros and cons of the system. We separate ourselves from the actions and consequences that ignorance may entail. If you decide to invest in this or another asset class, you are solely responsible for the consequences that your decisions and actions may have.
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