Even if you only have a passing interest in cryptocurrency, you will likely have had some exposure to the phenomenon of the meme coin, even if it’s only reading about Elon Musk’s shilling of Dogecoin.
Memecoins typically have no utility and their popularity is based on an Internet meme and supported by an online community. These community members are the ones who can push the price of the coin up or down. They have a low cost of entry, can often be bought using a card rather than having to deal with wallets and exchanges, and have the potential to swing big returns.
They are a high-risk form of investment, even in the volatile cryptocurrency world. Investors should only risk money they are willing to lose. Below, we look at 10 of the benefits of investing in meme coins to help you determine whether it’s the right financial vehicle for you.
1. There’s A Lot Of Choice
Dogecoin was the original meme coin and launched in 2013. It took a few years for the craze to really catch on but 2023 and 2024 have seen an explosion in these coins. Today, there are more than 1000 such cryptocurrencies available, including some that break the traditional mould of what a meme coin is. That means there’s a lot of choice for potential investors.
Interested investors can find whitepapers and project details online, as well as use lists like this shortlist for August 2024 to get a better idea of the individual projects. According to tech editor Kane Pepi, meme coins alone have a total market value of nearly $50 billion, so expect to spend some time doing that all-important research.
2. Early Investors Get Bonuses
New meme coins are being launched every month, and this brings new opportunities to the investor. Not only could the next big thing be hiding among the list of new tokens, but most coins offer presale periods.
During the presale, people who invest receive certain bonuses. These bonuses include money off purchases, additional tokens, and even airdrops. An airdrop means that the meme coin team sends out free coins to people who have invested. The airdrop might come in the form of Bitcoin, Ether, Solana, or other popular coins and can boost the lucky recipient’s wallet.
3. Small Investments
Many forms of investment require investors to put in thousands of pounds or more. Cryptocurrency, in general, has much lower costs of entry and you can invest a few pounds. This is even true of the presale coins. Coins like Dogecoin cost pennies, rather than pounds, but this isn’t the case with all coins.
LEASH, for example, is currently priced at over £250 but you don’t even have to buy a full coin, you can invest in 0.1 coins or less. Not only does this mean you can invest smaller amounts, but it also means you can spread a smaller investment over multiple projects, giving a diverse meme coin portfolio that has less chance of bombing.
4. Potentially Massive Returns
Even if Bitcoin’s price continues to increase, it is unlikely to ever yield the 1,000% gains it was once known for. The same is true of most of the big projects. As such, speculators and investors look to coins with smaller capitalization, which includes a lot of the meme coin projects.
Even minor news or moves by social media groups can have a big impact on price, potentially pushing meme coin prices through the roof. Even a small investment could yield a big profit, especially for early investors who got in when the price was low.
5. Vibrant Communities
A lot of people invest in meme coins for the community aspect, as well as the potential profits. Visit Reddit threads and join Telegram communities related to the meme coin you put money in and you will find vibrant, active groups of people. It can take some time to learn the terms but most groups welcome new members because they know it means more money flowing into the project they’re backing.
6. Creative Products
Meme coins are, as the name suggests, based on popular memes, digital art, and online jokes.
Dogecoin, which has gone on to become a popular choice of coin for crypto betting and is used at some online stores, uses a meme of Kabosu, whose photograph became an online meme in 2010. Frog-based coins like Pepe and the upcoming Pepe Unchained use the cartoon character Pepe the Frog.
Rather than paying hundreds or thousands of pounds to buy into NFTs to get your hands on a piece of modern culture, meme coins make it more accessible and more affordable.
7. Diversify Your Portfolio
Investment experts always advise that investors have a diverse portfolio that consists of different types of investment, as well as investments in a good range of different products and individual stocks or products. Meme coins are high risk, but they carry high potential rewards if you pick the right stock.
Whether your portfolio consists primarily of cryptocurrency, or you have a good variety of crypto and traditional investments already, meme coins offer another type of investment that you can use to diversify your risk-to-reward ratio.
8. An Introduction To Cryptocurrency
Some cryptocurrencies, from Ethereum to Solana and beyond, have their own networks and these utility coins have serious real-world applications. As well as being a traded cryptocurrency, Ether, for example, is the native coin used by developers who want to build decentralized apps on the Ethereum blockchain.
Investing in these projects typically means having to learn about blockchain and the project itself. Most meme coins have no utility and are based solely on popular Internet memes, so there is less to learn and less to research. They can provide a good in-road to cryptocurrency investment.
9. They’ve Performed Well
The cryptocurrency market is highly volatile. It does have the potential to make a big return on your investment, but it also has the potential to tank and can see investors lose large sums.
But, with this volatility comes the potential for big gains. And meme coins have, especially over the past 12 months, performed well. $MAGA has seen its price increase more than 2,000% so far this year, while POPCAT has enjoyed a 10,000% year-to-date increase and become one of the top 100 coins.
Not all meme coins will perform this well, however, and you will need to do extensive research to find those with the greatest chance of a profit.
10. They’re Less Serious Than A Lot Of Crypto Projects
The cryptocurrency market is all about technology, decentralized apps, and blockchain. There’s a lot of serious conversation around regulations, and it’s difficult to ignore the scams that persist within the industry. It can be overwhelming.
Meme coins, although derided by some major investors, offer a little more fun. As long as investors are careful and only invest what they can reasonably afford to lose, it can make an otherwise serious market a little more enjoyable.
Conclusion
Meme coins have exploded in 2024, and the popularity and performance of these coins look like abating any time soon. Although investors should do a lot of research, especially in online communities, to ensure they are investing in a coin with some value, meme coins have a low cost of investment entry and are more light-hearted than the usual cryptocurrency coins.
