Let’s face it; this space would not be as interesting if it weren’t for meme coins.
As much as I hate talking about this topic, rather, as nonsensical as it is, it’s time to talk about meme coins.
Why is this a thing again? Well, whilst meme coins never died, they’re making a resurgence once again.
Pepe the Frog and the meme-coin millionaire
For those who missed the news (I don’t blame you), someone has recently made over a million dollars from a $250 investment in a Pepe the Frog crypto asset.
Not over a year, not even a month.
It happened in just four days.
At this point, you’re gonna have people breaking Guinness World Records.
Before you get too excited and focus solely on/go “all-in” on a meme coin, here are some important things to consider.
These are some of the most speculative types of crypto assets
Now this is saying a lot, considering that this space (Bitcoin included) is already highly volatile, to begin with.
Meme coins are next-level speculation, so I couldn’t help but mention “gambling” in the title.
Crypto, in general, is not for the faint-hearted. So, don’t get into the space if you can’t handle the wild price action.
Very few trading pairs are available (at least when a meme coin is relatively unknown)
Few, if any, major centralised exchanges (e.g., Binance, Kraken, Coinbase, etc.) will be listing micro and low-cap cryptos in their early days.
Some marketplaces, notably KuCoin and Gate.io, tend to accommodate more micro and low-cap cryptos than the established options (though Binance has many supported assets too).
As a result, your best option is to buy your meme coins through a decentralised exchange (hyperlink), a.k.a. a DEX). Uniswap is one of the most popular choices.
You can connect to various DEXes with non-custodial wallets such as Trust Wallet, Metamask, and Coinbase Wallet (not the exchange) have extensive support for ERC-20 (Ethereum-based) tokens.
Beware of expensive fees on Ethereum
Whilst multiple layer-2 protocols (L2s) exist on top of Ethereum, let alone other base chains (L1s), many noobs do not understand how these things work.
Thus, they will justify forking out dozens of dollars (that should cost cents) for transactions directly on Ethereum, and expect their meme coin to go parabolic, thus covering the expensive transaction fees.
I admit that this is less of an issue in 2023 than the bull market in 2021 when people were forking out hundreds of dollars for gas (transaction) fees on Ethereum.
Regardless, DYOR and see what is a “fair price” to pay when carrying out a trade before proceeding.
Another thing to factor in with all crypto transactions (particularly swapping directly from one crypto to another) is the exchange rate. Marketplaces (notably centralised ones) that offer trades for ultra-low costs most likely make plenty of profit from crappy exchange rates.
Whether an intermediary, a seller, or both, someone is profiting along the way, which is fine…provided the costs are justified, and the buyer is not swindled in the process.
For perspective, this is nothing new and is very prolific outside of crypto — merchants, foreign-currency exchanges, banks, car dealerships…you name it, they all know what margins enough people are willing to pay to consider paying for particular goods or services.
Beware of rug pulls and spin-offs
Many people, particularly noobs, fall for scams hook, line, and sinker.
Despite legitimate-sounding options such as Squid Game (SQUID), many people throwing money into this digital asset were allegedly swindled by a good olde rug-pull.
However, some sources mentioned that the project behind the crypto is now a decentralised autonomous organisation (DAO); good luck trying to convince many outsiders that this is legit.
Let’s not forget the multiple variants out there masquerading as another form of said meme coin, only to be another rug pull, or, at best, give you modest returns (but nothing like the 50,100, 200x that you expected).
As per scam coins/tokens in general, three Spanish researchers released a report covering over 27,000 tokens available for trading on Uniswap. Their results showed that >97% of these were deemed “malicious”.
“The final list contains 27,588 labelled tokens, 631 labelled as non-malicious tokens and 26,957 labelled as malicious.”
Despite this, some on crypto Twitter doubt the methodology used in their research. Moreover, very few scientific papers exist in the grand scheme of things, mostly because this aspect of crypto (i.e., investigating fraudulent tokens on DEXes) is still relatively new.
Whatever the actual number or percentage of bogus crypto assets, exercise due diligence and proceed with caution before allocating funds to any crypto, particularly meme coins.
Have an exit strategy
Do not underestimate the need to take profits, particularly with these highly-speculative altcoins and tokens.
Two common ways to approach this are:
1) Directly cashing out into fiat currency;
2) Converting your meme coin into a major crypto asset (BTC, ETH, BNB, ADA, etc.).
I would opt for both of these to varying degrees, depending on your financial circumstances, i.e., if you’re financially secure, I would convert at least half of the earnings into one/some of these major crypto and invest the remainder into other assets.
As always, do what works best for you.
So, should you put money into meme coins?
Short answer: No, focus on other digital assets worth investing in, and never go all in on just one crypto.
Long(er) answer: I would only throw in $100 max into a meme coin and possibly pick two or three that are still relatively low in market cap and getting much hype, especially for prolonged periods.
Treat meme coins as gambling and nothing else.
Some of you would be surprised that I would even recommend putting some money into these, albeit minuscule amounts.
Like the lottery, you gotta be in it to win it.
Rest assured, in a world full of instant gratification, impatience, greed, etc., plenty will want to find that “1000x gem” to boast about becoming a meme coin millionaire.
Even if the odds are stacked against you, there is always hopium to keep you going. You will be astonished by how many people follow meme coins, particularly the dog-themed ones (DOGE, SHIB, FLOKI, etc.), mostly attributed to tweets from “The Dogefather” himself.
Dogecoin, the OG meme coin that has stood the test of time (yes, it is still a top-10 crypto by market cap), has made some millionaires. However, on the flip side, it has cost many people significant fortunes, which you will probably never hear about out of embarrassment/shame.
In conclusion, this light-hearted subset of crypto is here to stay. The meme coins that I think will increase in popularity in the coming months and years relate to the US SEC Chairperson Gary Gensler, former US President Donald Trump, and now Internet personality Andrew Tate. In my opinion, these polarising figures (notably Trump and Tate) will lead to some wild activity for the tokens bearing their names.
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None of this is financial advice; I am not a financial advisor.
The opinions expressed within this piece are my own and might not reflect those behind Dogecoin, Pepe meme coin, or any other meme coin or entity referenced here.
Please do sufficient research before investing in any crypto assets, staking, NFTs and other product affiliated with this space.
I hold some SHIB, FLOKI and GENSLR for s&*ts and giggles, accounting for less than 0.5% of my total crypto portfolio.
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