Earlier this week, the meme coin Shiba Inu flipped Dogecoin becoming the #1 meme coin cryptocurrency. Although many crypto purists may lament the fact that we have two meme coins in the top 10 cryptocurrencies, I do think that there is an important lesson for cryptocurrency investors. First, we can see that meme cryptocurrencies have a powerful way of connecting with their audience and getting “free” marketing and promotion. Second, I do see a trend in which “meme” coins are incorporating more and more useful features as well.
Meme Coin Analysis
I want to start off by saying that I totally understand the frustration that many people have when discussing meme coins. How are we supposed to get the world to take crypto seriously when two of the top ten coins are complete joke coins? How can a meme coin like Doge have a higher market cap than something like BAT which is trying to revolutionize digital advertising or UNI which is the governance token of the leading decentralized exchange?
Although I understand those frustrations, I do think that meme coins show how important viral marketing is in crypto. Not only do meme coins show that tapping into mainstream consciousness can be incredibly powerful, I have noticed a gradual progression in which meme coins have begun to take on the characteristics of “real” cryptos as well.
Consider that Doge was primarily a way of mocking rampant speculation at the time it was created. Although Shiba definitely tapped into the meme -like nature of Doge, we did see a bit more depth and development in that Shiba has its own exchange, allows users to provide liquidity, and even supports charity. Floki Inu is undeniably a meme coin as well, but extends this utility of Shiba by incorporating an NFT marketplace, NFT Gaming community, and even an educational platform.
Looking back at the progression of Doge > Shiba > Floki, I see two key points. First, meme coins can be incredibly popular, and even a coin with a lack of strong fundamentals can achieve an amazing price and market cap simply by tapping into cultural trends and memes. That being said, it’s not guaranteed that the next meme coin you hear of will make you rich, and investing in meme coins can be a bit like a game of hot potato; everything is fine when the price is going up, but you don’t want to be the one stuck holding the bag at the end.
Second, I think that the effectiveness of meme coins could be adopted by “real” cryptos as well, and I wouldn’t be surprised if we see more “meme coins” that are actually valuable projects simply wrapped in the “meme” outer layer for marketing purposes. IMO, we are seeing this now with Sihba and Floki. Although both projects are clearly tapping into the meme coin genre for publicity, they also bring useful features. I wouldn’t be surprised if more projects in the future realize that the combination of a good idea and meme marketing allows them to gain greater adoption than a great idea alone.
As always, this article is nothing more than my thoughts on the matter and should not be taken as financial advice. Feel free to leave your thoughts below, and thanks for reading!
References
https://shibatoken.com/
https://www.coingecko.com/en
https://decrypt.co/84592/shiba-inu-shib-flip-dogecoin-bitcoin-slumps
