What Are Meme Coins And How Are They Different From Other Cryptos?

In the rapidly evolving world of finance and technology, cryptocurrency is taking center stage. Cryptocurrencies are digital assets that enthusiasts often purchase to hold as an investment or use to purchase real-life goods and services. While cryptocurrency itself is still relatively new, more recently, a new category of crypto has become available: meme coins.

Meme coins share certain similarities with cryptocurrency, however, they are also different in many ways. Cryptocurrencies have now cemented themselves as a serious investment tool, however on the other hand, meme coins are often light-hearted and fun. Let’s explore exactly what meme coins are and how they differ from other crypto coins. 

What Are Meme Coins?

In very basic terms, meme coins are a type of cryptocurrency. Meme coins often get their start from memes on the internet or trends and fads on social media platforms. This is in contrast to traditional crypto coins, which typically are built and created with a well-defined purpose. The fun part about meme coins is that they usually simply start out as a good joke and gain popularity through the internet. 

It’s worth noting that while meme coins are fun and lighthearted, many meme coins that started out as simple and silly jokes have since turned into lucrative investment options for buyers. Some coins have been launched for pennies and have skyrocketed in price. So, while investors may buy in because they enjoy the silly theme or find the online community engaging, they also may end up seeing huge returns if their investment does well. 

Because of this, many investors are often researching the best meme coins to buy into that show great promise of big returns down the road. In a detailed memecoin ranking review, Techopedia author and crypto expert Soobin Choi explains that even though most meme coins lack practicality some have grown to billions of dollars in market capitalization. 

Characteristics of Meme Coins

Meme coins feature some unique characteristics. Some of their features are similar to other digital coins, however certain aspects of meme coins are truly unique and special to just meme coins. 

Community-Driven

One of the most interesting characteristics of meme coins is that they are community-driven. These coins, which start out as mere jokes, quickly foster huge communities online. These communities bolster the coin, engage with one another, and drive adoption. The value of a meme coin can shift higher or lower depending on the influence of the coin’s community and things like social media trends, news stories, and more. 

This is much different from traditional crypto coins. Other, more traditional crypto coins that are not categorized as meme coins are typically more technology-driven rather than community-driven. The community-driven nature of meme coins means that their price can swing wildly and move at any time depending on the market sentiment and community.

Limited Technological Innovations

Major cryptocurrencies are usually built with technology in mind. They are bought, sold, and valued based on their scalability, security, and smart contracts. On the other hand, meme coins typically lack advanced technology in this way. Instead, meme coins are usually built using existing blockchain technology. Instead of focusing on technology, meme coin creators usually focus more on creating a fun and interesting coin that will engage their community.

High Volatility

Volatility is one thing that meme coins have in common with traditional crypto coins. Most crypto is thought to be very volatile, moving up and down in price with very short notice. However, meme coins are sometimes considered the most volatile of all. This is because their value and worth depend on their community. This speculative nature means that the value of a meme coin could skyrocket at any moment or plummet just as quickly.

For investors, this is unique. It means that investing in a meme coin, or a variety of meme coins, could not only diversify an investor’s portfolio but also possibly mean large returns gained quickly as coins rise in value. However, it also means that coins can lose value quickly, which is something all investors must be aware of before buying in. 

Low Entry Barriers

A unique aspect of meme coins is their low barrier to entry. Some traditional crypto coins have gained popularity in recent years and as they’ve grown in popularity their price tag has also grown to match. This has put some traditional coins out of reach for the average investor. 

However, new meme coins are launched regularly and these new coins are often first sold for a bargain. This means that investors of all financial levels can buy into meme coins. This not only breaks down barriers but makes investing in crypto more accessible to a wider pool of people. 

Why Meme Coins Attract Attention

Meme coins are a fun and unique way to get involved with cryptocurrency. They attract attention from seasoned investors as well as new investors. Let’s explore why. 

Social Media and Viral Trends

When a meme coin is going viral on social media, it can be hard to ignore. These cryptocurrency coins benefit from the power of viral marketing on platforms like Twitter, Reddit, and TikTok.

Once a coin gains popularity, it will be shared by thousands, if not millions, of enthusiasts online. This means that its audience will grow quickly and the coin will gain attention. A big plus about this is that meme coins are helping people learn about crypto. As meme coins go viral online, individuals who don’t know much, or anything, about crypto, often see these viral trends and become interested. 

Accessibility and Low Cost

Meme coins attract a lot of attention because they are accessible and they are usually priced well. They are more accessible than some established traditional crypto coins which are now sold for thousands of dollars. Instead, meme coins can be bought and sold for mere pennies, making them accessible to a large pool of everyday people all around the world. 

Additionally, because meme coins are usually sold for less, it means that investors can purchase more coins. Instead of buying one or two coins, investors can purchase five hundred or one thousand coins. Should a coin succeed, the potential value in this quantity of coins doing well could truly change someone’s life. 

Celebrity Endorsements

Like some other crypto coins, meme coins are often backed and touted by celebrities. This attention gets meme coins noticed. When a meme coin is launched, it needs significant momentum online to get the ball rolling and increase awareness. So when a celebrity with a huge following on social media tags or mentions a coin, it has the potential to change its trajectory forever. 

Speculative Opportunities

As mentioned above, meme coins are known to be extremely volatile. While this might deter some investors, it actually attracts a lot of investors who are looking to earn short-term gains. Because meme coins can grow in value so quickly, it means that investors can buy in low and sit on their assets while they rise in value. Investors can then sell when they feel ready, and either keep the profits or re-invest into another meme coin or crypto. 

Risks and Considerations

Meme coins present a number of unique and enticing attributes that attract many new and seasoned investors. They are fun, and silly, and usually have a strong community backing and social media presence. Similarly, they can be bought at a low cost which makes them more accessible to a wider pool of investors. While meme coins are powerful and fun investment tools, they do come with some risks and considerations that everyone should thoroughly research and consider before buying in.

The first and most common consideration when buying meme coins is their speculative nature. These coins do lack technical innovation and long-term viability in most cases which can lead to wild price fluctuations and financial loss in some cases. Investors should be aware that any type of investment, including those in crypto and meme coins, is a risk. Any money invested could potentially be lost. 

Conclusion

Cryptocurrency has gained unprecedented levels of popularity and adoption since it was first launched in 2009. Some traditional coins that were first sold for mere pennies are now bought and sold for thousands of dollars each. Similarly, while crypto was first thought of as just a financial tool, it has now been widely adopted and can be used to purchase clothes, eat out, pay for holidays or even purchase a car.

Meme coins, which are a special type of crypto coin, present unique opportunities for investors. Meme coins are created with a joke, or meme, in mind. They often get their value from their community and they can fluctuate in price greatly. Because of this, investors can stand to see large gains or losses from their investments. As time progresses, it is likely that the crypto industry will see a growing number of meme coins as they continue to skyrocket in popularity. 

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