The compelling case of meme coins - fad or future?

By Feroze Medora

March 23 2022
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What started as light-hearted internet humour has now become serious business. The meteoric rise of meme-inspired cryptocurrencies, also known as meme coins, has captured the attention of investors and mainstream audiences worldwide.

The recent crypto market crash does not come as a shock to investors who have accepted the price volatility of the asset class. While market lows make interesting headlines, the story of market highs for certain coins make for a far more fascinating read - like Dogecoin. Easily one of the most popular meme coins in existence, the meme coin lost around 40 percent of its value during the aforementioned crash. However, while many might use this as reason to say that meme coins hold no inherent value, it cannot be forgotten that the coin saw an increase of over 6000 percent at its peak.

A coin inspired by a meme producing incredible returns for investors? Now that shows you the power humour holds in the world of crypto.

While this subset of cryptocurrency sees both passionate supporters and naysayers, one question still remains - will these coins stand the test of time, or will they be forgotten like the many memes we see come and go?

Here come the big dogs

Dogecoin started off as a joke in 2013 based on the ‘Doge’ meme, an image of a Shiba Inu with grammatically incorrect statements written in Comic Sans. While the coin was never intended to be taken seriously, the support of social media platform Reddit caused the popularity of the coin to soar. Reddit users began using Dogecoin to tip online content creators for noteworthy content and this practice of Dogecoin tipping then spread across to platforms like Twitter and Twitch, receiving online shoutouts from several major celebrities - most famously, Elon Musk.

In July 2020, there was a social media campaign that sought to encourage others to buy Dogecoin in order to push the price to $1. Despite fervent efforts by the online community, Dogecoin supporters have yet to see it hit the dollar mark even after two years. However, considering Dogecoin’s ‘humble’ beginnings, boasting an all-time high of $0.73 is testament to its close connection to internet culture and the power of social media in this day and age.

However, the dog-themed coins did not stop there. In August 2020, an anonymous individual (or group) named Ryoshi introduced the Shiba Inu coin, a token that proponents tout as the “Dogecoin Killer”. While that description is still up for debate, there is no doubting the coin’s popularity. In October 2021, Shiba Inu’s price skyrocketed more than tenfold - thanks to a combination of its online community’s efforts to promote the coin, and its ability to capture the interest of those looking to find the next Dogecoin.

Meme coins are illustrative of a culture that likes to distinguish itself from the more serious traders and institutions on Wall Street. Rather than focusing on technical analysis and longevity, the community of meme coin enthusiasts choose to instead emphasise humour and virality on social media.

Are meme coins all talk?

In the ever-expanding universe of cryptocurrency, the aforementioned Shiba Inu coin has emerged as an unexpected standard bearer among the multitude of meme coins. Apart from championing an adorable mascot like most meme coins, the Shiba Inu crypto project stands out thanks to its tokenomics and intended purpose.

According to the project’s ‘Woof Paper’ (a play on white paper), Shiba’s current goals are to further the adoption of blockchain through various means, including the development of their own decentralised exchange ShibaSwap, a community charity, and an NFT marketplace in the future. These are ambitious goals for what many deem a simple Dogecoin copy.

With its passionate following, Shiba Inu is a glimpse into a future where meme coins are not just seen as a joke. What these coins have mastered, in comparison to other types of cryptocurrency, is virality and community engagement. This has proven to sustain many meme coins - even those that lack fundamentals.

However, as interest in cryptocurrency grows and more regulators pay attention to the market, we could start to see more coins that, while aesthetically resembling memes, have specific uses and inherent value.

What’s next for meme coins

The future of meme coins is still a highly debatable topic, with both sides holding valid arguments. However, if there is one thing that the cryptocurrency market has taught all of us, it is that nothing in this industry is predictable. Many thought that Bitcoin was just a fad but look at where it is today.

Two of the main notions of cryptocurrency is that community is the heart of any project and that the future of finance lies in new decentralised technology. While there are aspects of community building that mainstream coins could learn from meme coins, many meme coin developers should remember the tools to stay strong in a volatile industry like crypto - solid fundamentals and a clear vision.

It is without a doubt that one day, we will see a coin that perfectly envisions both. When that happens, then maybe we might see a new coin at the top - regardless of how cute its mascot is.

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