Meme Coins and “Shitcoins”: Why Are These Crypto Jokes Overcoming Bitcoin?

News JVTech Meme Coins and “Shitcoins”: Why Are These Crypto Jokes Overcoming Bitcoin?

Meme coins or shitcoins, the secret of cryptos

In 2013, the market had no more than 50 different cryptocurrencies, but in 2022, websites listing cryptoassets register almost 20,000 cryptocurrencies, in which a total of 945 billion dollars were invested. The number doubled after Bitcoin’s price explosion in 2021. It is currently estimated that around 1,000 new cryptocurrencies are created every month, not counting the many tokens issued in parallel.

Among this multitude of virtual coins, meme coins, or for the most critical “shitcoins”, are a significant amount. Unlike other cryptocurrencies, these coins were not built on a revolutionary idea aimed at filling a need, but on concepts related to current events or other popular movements. Typically, these tokens are issued on existing cryptocurrency networks like Ethereum.

These tokens are often referred to as “shitcoins” by part of the crypto ecosystem. This controversial term describes these cryptocurrencies as assets that have no intrinsic value and are suspected of being fraudulent.

However, some of these meme coins have won over many investors and have risen to the top of cryptocurrencies in terms of valuation.

Why are memecoins so popular?

When it comes to memecoins, two stood out clearly from the others. Such is the case with DOGE, which has become the benchmark for memecoins since its inception in 2013. Although the dog-headed crypto is a supposed joke borrowed from the famous DOGE meme, it has won over many investors, including US billionaire Elon Musk.

In fact, after his numerous interventions on Twitter, Elon Musk made a significant contribution to the enthusiasm surrounding DOGE. The Tesla CEO turned DOGE guru regularly posts cryptocurrency testimonials that cause crypto prices to skyrocket very quickly.

More specifically, the businessman even accepted payments in DOGE in the online stores of his companies (Tesla and SpaceX). In addition, the recent takeover of Twitter also fuels investors’ hopes that DOGE will one day be integrated into the social network in some way.

All of these elements have certainly built the reputation of DOGE, which is currently the ninth largest cryptocurrency with a capitalization of $10 billion.

More recently, Shiba Inu, which is nothing more or less than an even clearer alternative to DOGE, has also moved up the rankings to 13th. So there really aren’t any rational explanations for this popularity, but a few things seem to be the common dismantling of these trends.

The price

First of all, a similarity that we find on the same corners is the price. This is because most coins are usually worth very little. For the Shiba Inu, the price is $0.00001. Thus, newcomers are enthralled by the idea of ​​getting millions of Shib in hopes that they will one day reach a similar value to Bitcoin or Ethereum.

However, it is important to clarify that this is simply impossible. In fact, their low price results from a large number of coins issued. As for the Shiba Inu, its price is so ridiculous because there are 549 trillion pieces compared to 21 million for Bitcoin, for example.

United Churches

Beyond this affordable aspect, the same coins benefit from a resonance thanks to their very active community on the networks. From the Doge Army to the Shib Army, these virtual characters have created real communities of solidarity, leading some people to join the adventure.

Extreme volatility

Additionally, these crypto assets have clearly demonstrated their troubling volatility in recent bull runs. For example, in 2021, the Doge saw a rally from $0.009 to $0.75 in just 5 months, multiplying investors’ portfolios by more than 80 times. This effect of FOMO (fear of missing out on opportunity) inexorably pushed people to take advantage of the rise. However, it is clear that the return of the stick is inevitable since the Doge returned to visit the $0.08 after this increase.

In summary, given the circumstances, the strength of these same coins lies in the increased volatility they generate. While some have made their mark, it’s important to remember that these cryptos are often the scene of excessive speculation that can get very expensive for those who buy them.