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Dogecoin was launched in 2013 just for fun to mock numerous Bitcoin forks. Its founders, software engineers Billy Markus and Jackson Palmer, would never think the coin was to reach the top of the cryptocurrencies’ list.
Many DOGE clones have appeared ever since and become one of the hottest and controversial topics in crypto in 2021. New “dog money” emerges almost every day. What drives the craze, and why do people love meme coins so much?
Dogecoin: making fun in a serious place
Bitcoin was invented in 2009, and very soon, its limitations became evident: it wasn’t affordable to mine it, the fees were too high while transaction speed remained low (Bitcoin block time is 10 minutes). This is how first forks started to emerge claiming to be alternatives to Bitcoin and offering modifications of the Bitcoin protocol. While some of them made sense, the others were quite useless but still were seeking investors’ attention.
Two IBM software developers, Jackson Palmer and Billy Markus, thought in 2013 that the number of Bitcoin forks was ridiculous and decided to launch their own coin. While other cryptocurrencies positioned themselves as serious assets that would “soon become worth zillions,” Dogecoin creators wanted to make fun of this and create a coin with the sole purpose to mock what was going on in the market.
“The original intent was a parody of all the ‘serious’ clone coins that were trying so hard to differentiate themselves, but all seemed the same,” Billy Markus in 2013.
At that time, one meme was at the peak of its popularity: a photo of a Japanese doge Shiba Inu with a funny facial expression and captions with garbled orthography. Absurd phrases written in a Comic Sans font were welcomed not only by the internet users but also crypto enthusiasts — this is how Doge became the logo of the first meme cryptocurrency.
In early 2014, DOGE was trading at $0.0015 per coin, and by 2021, it has reached an all-time high at $0.73. It came out that crypto lovers like jokes more than it seemed.
What makes meme coins popular?
Meme coins are loved so much for the same reason as memes themselves — we love sharing funny content, and it easily goes viral. In crypto, this helps coins gain billions in market capitalization.
Together with NFTs, meme coins drew a lot of attention to crypto in the spring of 2021 and helped it bring many newcomers. By that time, Dogecoin already had a strong community called the Dogecoin army that helped the asset reach its highs. In Twitter and Reddit, people teamed up to pump the coin and engage new members. One of such campaigns was carried out in celebration of the so-called “Dogecoin Day” on April 20, soon after which DOGE reached its ATH.
What else makes meme coins’ popularity?
1. Everyone likes jokes & fun
Dogecoin has taken its high place by doing the opposite of what other coins do — being serious, offering a robust use case, and promising huge profits. As Dogecoin founders said, they built the coin in 2 hours with the sole purpose to have fun, without any views to beat Bitcoin or alike.
Not taking itself seriously allowed DOGE to outperform many other coins — such a playful approach is very popular in crypto. In a stressful environment where people constantly earn and lose money, Dogecoin is a way to reduce tension and treat everything as a game, and this makes people even more excited. Who said you can’t trade with fun?
Big personalities like Elon Musk agree with this — they sympathize with Dogecoin because of its memes:
We’ll get back to Elon Musks’ influence on meme coins a little further.
2. Potential high gains
Although initially Dogecoin wasn’t created as an asset to make high gains with, its community quickly began to shill and pump the coin with slogans like “1 Dollar for DOGE”. At some point, this has even become a competition: many Doge-like meme coins that were created after DOGE state that beating it by market cap was one of their goals.
This is the reason why many meme coins of this kind offer their holders an opportunity to profit. A fresh token is thought to have more chances to surge 10X within several months than established coins. However, the reality is less optimistic. While some coins like SHIB really demonstrate high gains, many others fail to show a significant price increase. Nevertheless, meme coins’ volatility suggests they may work well as assets for day trading. In any case, ChangeNOW recommends you do the due diligence of any meme coin’s team and roadmap before investing in it.
3. Reverse psychology
Reverse psychology is when you want people to do something, you suggest they do the opposite, and they want to do the thing you initially wanted them to do. In the case with Doge, this might have not even been on purpose: the coin’s creators did a lot not to make it an appealing investment tool, but that’s what it has ultimately become. Among other things, Palmer and Markus set a pretty high emission speed with no maximum supply for Doge, which seems to have created a great inflation risk. However, this didn’t prevent millions of users from investing in DOGE, including business mastodons like Elon Musk.
It seems that in the case of meme coins, reverse psychology gives crypto enthusiasts a feeling that they are creators of the project, which inspires them to aggressively shill the coin. When you claim your token was created for fun, it’s much easier for the users to say — “no, that’s not the only purpose” — and foster the asset’s price growth.
4. Celebrities’ attention
As shown in paragraph #1, everyone loves memes. And celebrities are obviously not an exception! Elon Musk seems to sincerely love Dogecoin — his first tweets with strong support for the cryptocurrency date back to 2019. Since then, he keeps frequently posting jokes and even Tesla announcements related to Doge and its acceptance, and the name of the cryptocurrency is now very much associated with Elon Musk. From 2019, the coin’s market cap has increased a few dozen times.
The billionaire is not the only public person to support Dogecoin. Such celebrities as Mark Cuban and Snoop Dogg also endorse the cryptocurrency by introducing it to their audience. The latter has even made a where he flies on a spaceship to take over a planet accompanied by a Shiba Inu dog.
Shortcomings of meme coins
Meme coins look like a fun thing to deal with, but there are a number of issues that an investor should be aware of before jumping in.
Lack of innovation and use cases
One key drawback of meme coins is that they are entirely driven by the enthusiasm of their users and barely have any real-world use case or value. Many of these tokens offer very similar mechanics that can only be of interest for users deeply involved in meme coins’ activity. They position themselves in very similar ways; there are so many “dog tokens” proposing the same slogan of outperforming other top meme coins that it has even become ridiculous.
Abundance of scams
Many meme tokens’ buyers engage with such assets in a search for easy money and nothing more. Users of this type often lack understanding of security in trading and fall victim to scams.
Centralization imposed by influencers
The main driving force behind meme coins are their communities, so these assets should be decentralized by nature. However, many meme tokens owe their popularity to tweets by celebrities like Elon Musk, and this has its flip side — decentralized currencies that can be so strongly affected by a single person can’t be considered truly decentralized. Such influence by celebrities goes against the philosophy of crypto.
Another non-obvious downside to the cases when celebrities pump meme coins is that these people can also dump them. Dogecoin plunged after Elon Musk called it “a hustle” in an SNL show. Shiba Inu went beyond and triggered such a case itself — the team sent half of the token’s supply to Vitalik Buterin “for safekeeping”, but he burned a major part of it, which was followed by a SHIB price drop.
However, in responsible hands, such mistakes can provide grounds for charity. After burning some SHIB, Vitalik sent the remaining coins to a non-profit fund fighting Covid in India. Moreover, meme coin charity can even be decentralized — DOGE and HOGE communities have done charity fundraising, too.
Meme coin examples
Besides Dogecoin that has been the leading example in this article, there are many other community-driven meme tokens that are worth your attention. Here are some of them.
Shiba Inu
This token is one of the oldest ones in a huge cohort of “Doge-like” cryptocurrencies that started to massively emerge after Elon Musks’ promotion in 2021. Many SHIB clones proclaim the same goal of becoming “Dogecoin killers,” but the original Shiba Inu is the only one to have achieved this so far — for a small period in December 2021, the token’s market cap exceeded Dogecoin’s.
SafeMoon
SFM has main traits of a meme token: it has an active community that pushes its price up (the founder John Karony has been awarded for building the “crypto community of the year” that reached 1 million members), a clearly outlined tokenomic model (liquidity generation and rewards for holders), a slogan (“Safely To The Moon”), and celebrities supporting it (a YouTuber Logan Paul and a rapper Lil Yatchy, among others). The token was launched in 2021 but has already migrated to a new BSC contract.
Mona Coin
Not many people know that Doge-like meme coins have a competitor — a cat crypto coin from Japan! This meme token was launched in good old 2013, just the same as Dogecoin, and gained huge traction that year: the asset even reached #12 on CoinMarketCap’s list. However, the cat community seems to be not as active, and Mona Coin eventually dropped to the #492nd position.
HogeFinance
This token continues the meme coins’ tradition to exploit the love of the crypto community to cute animals — this time, hedgehogs! HOGE is a typical meme token made in 2021, which means it has a number of incentives for the community (fees for token holders paid from every transaction, etc), and, of course, a slogan — “DOGE but DeFi”. The token has had a series of pumps throughout the year but hasn’t demonstrated a steady growth so far.
Bottom line
Few experts recommend meme coins as major investment assets, but they can definitely be included in a diversified portfolio or become a tool for day trading. Meme coins are a big part of what was going on in crypto in 2021, and millions of holders and active users prove that. After a while, we will see if meme coins are a passing event or something long-lasting. However, people’s love for memes and the success of Dogecoin suggest that meme tokens are here to stay as an inherent part of the crypto landscape.
If you’re feeling lucky about Dogecoin or other meme coins, feel free to visit ChangeNOW and buy the tokens listed above or many others. We don’t ask for registration and charge no hidden fees — what you see is what you get.
