Last week, social media was abuzz with success stories of traders who struck gold overnight by investing in the PEPE meme coin. But is this really a reliable way to accumulate wealth, or is it more like playing the lottery and hoping for the best? The answer lies in the different approaches taken by different socio-economic classes when it comes to playing the lottery.
What is a meme coin?
Meme coins are digital currencies that use internet memes as their inspiration. Unlike traditional cryptocurrencies, meme coins do not typically have real-world applications or use cases beyond being shared among users. Meme coins function similarly to standard cryptocurrencies and can be bought and sold on cryptocurrency exchanges such as Binance, OKX, Coinbase, Bybit and Gemini.
They are known for their high volatility, and their prices are heavily influenced by social media sentiment and other factors, making them prone to sudden price swings and market manipulation, which has resulted in some investors losing substantial amounts of money. However, despite their risky nature, meme coins still have a significant following of supporters who view them as a means of challenging conventional financial systems and interacting with a broader online community of like-minded individuals.
PEPE meme coin a lottery?
The PEPE meme coin experienced an astronomical 9,071% surge in the run-up to its Binance listing, reaching a jaw-dropping market capitalization of $1.8 billion. However, given the coin’s recent breaking of crucial trend and support levels, traders are now urged to be cautious and focus on risk management. Meme coins, especially those with anonymous developer teams, are vulnerable to rug pulls, and price fluctuations tend to be the most pronounced during Asia trading hours.
So, what can we learn from this? On one hand, we have the billionaire investor Warren Buffet, who invests in blue-chip stocks that closely follow the growth of the US economy. Using funding that consistently remains 2–3% below his peers’ funding rates, Buffet has managed to amass a personal fortune of $112.8 billion. The US economy has shown steady growth over his lifetime, and investing in well-known blue-chip names was sufficient to benefit from this growth. Buffet’s success holds two crucial lessons: investing in blue-chip names without taking unnecessary risks is adequate, and staying in the game for an extended period allows for the accumulation of substantial wealth. Thus, safety and longevity are critical factors in becoming wealthy.
On the other hand, we have the lottery, where the promise of achieving wealth quickly with minimal investment and effort is too hard for people to resist. Despite the astronomical odds of winning the Powerball jackpot — 1 in 300 million — the average player spends nearly $200 per year, which accumulates to a considerable amount over time. Although everyone contributes a meager sum, only a handful of lucky people get to enjoy the perks, effectively making everyone else pay for the winner’s winnings.
Interestingly, research indicates that the “poor” tend to play the lottery regardless of the odds, while the “rich” only do so when the jackpot offers significant returns. For the wealthy, winning a $10 million jackpot might not make much of a difference, but a $100 million or higher jackpot would pique their interest.
The PEPE meme coin and the lottery are two sides of the same coin. Both offer the possibility of quick wealth with minimal investment, but both come with significant risks. While Buffet’s investment strategy emphasizes safety and is usually a long-term scheme, playing the lottery or investing in meme coins is more like playing the odds and hoping for the best.
What othermeme coins are making waves?
The surge in popularity of meme coins can be attributed to various factors, including the growing fascination with cryptocurrencies and the relative ease of creating new digital currencies. Several meme coins have garnered attention for their clever branding and incorporation of popular culture references, which have fueled interest and speculation. The social media-driven aspect of meme culture has also played a significant role, with influencers and online communities endorsing their preferred coins and spreading the word to their followers.
This has created a frenzied environment of buying and selling, as investors aim to capitalize on the hype and take advantage of the unpredictability of these highly speculative assets.
Here are several meme coinsthat have gained popularity and attention:
AiDoge positions itself as a new web3 platform for meme creation and sharing using AI technology. The project has gained significant attention, with its presale reportedly raising over $6.5 million.
Ordi is a meme coin paying homage to the Ordinals protocol, which is currently the largest with a value of $400 million.
BOB is an AI bot that provides tweet summaries to Twitter users who reply with “@ExplainThisBob”. Its programming includes automatic responses to tweets made by Elon Musk, which have earned BOB praise from Musk himself and garnered a large following of several thousand users.
MONG is a recently launched meme cryptocurrency project in 2023. What sets MONG Coin apart from other meme cryptocurrencies is its association with an established NFT collection called MONGS NFT, which was created in January 2022. The collection features 6,943 NFTs, with each NFT portraying a distinct mungo (mongoose).
TURBO is an innovative cryptocurrency with a unique token economy that aims to become the meme coin of the future. Unless many other meme coins, TURBO is developed almost exclusively using ChatGPT.
Milady Meme Coin has its native token called LADYS, which can be utilized to pay for online goods and services. The token’s value received a lot of attention after Elon Musk tweeted about the Milady NFT meme. Currently, the market capitalization of this meme token has exceeded $52 million (As of 20th May 2023).
WOJAK is a new ERC-20 token, inspired by the famous Wojak meme. Since its inception, the token has gained massive momentum and at its peak, it has surged over 1000%.
Floki is a cryptocurrency that initially started as a meme coin inspired by the dog of Elon Musk. However, it has now transformed into a complete Web3 ecosystem that comprises NFTs, DeFi, a metaverse, and prepaid gift cards for Visa and Mastercard. The project has gained a lot of attention as it was recently added to the list of cryptocurrencies on Binance.
XRdoge is a meme coin on the XRP ledger. Similar to Floki, they are not a new memecoin. The reason why they are mentioned is that I felt that XRP needs to have their own doge and have some fun. The fun elements could bring more hype to the Ripple ecosystem.
The newer memes that are trying to ride on the PEPE waves, like BIBI, BOBO, PEPO, and PIPI would need to find their own niche very soon. Other Chinese-themed coins like Pogai and LowB got to gather more mandarin speaking communities to join in the fun. If you are a Cate, SquidGrow, TSUKA or Renewable coin and not part of the frog or dog craze, you just got to wait for your turn to shine.
It is worth mentioning that while newer meme coins have recently gained significant popularity, older meme coins such as Doge, ShibaInu, Pitbull, RichQuack, Saitama, Baby Doge, Safemoon continue to thrive by actively maintaining their community and working on their projects. This demonstrates their commitment to longevity and a sustained presence in the ever-changing world of cryptocurrency. The level of dedication and perseverance displayed by these coins is a positive indication for the meme coin industry, as it suggests that some of these coins may have staying power beyond just a momentary hype cycle. The continued relevance and demand for these older meme coins highlight their ability to maintain a loyal following and leave a lasting impact, even in the midst of emerging trends and shifting market conditions.
It should be noted, however, that meme coins are known for their strong online communities, driven by hype and speculation, and may not necessarily have serious real-world use cases or underlying technology.
The underlying for its success would still be community and having fun together. If a meme coin survives the initial stages and gains support from its community, its games, NFTs, or even metaverse would have a much higher chance of success. Their new revenue streams would be vital for them to survive in the bear market and beyond.
It’s essential to consider the risks and rewards of any investment opportunity carefully. While the promise of quick wealth might be tempting, long-term, low-risk investments are the safest and most reliable way to accumulate wealth.