With NFT sales volume steadily declining since January 2023, memecoins – such as $PEPE, $DOGE, and $TURBO – have emerged as the center of attention in the crypto space. Unlike conventional cryptocurrencies such as Bitcoin and Ethereum, memecoins are primarily used as trading tools and lack any specific utility associated with certain blockchain features, such as Ethereum’s use of Dapps and DAOs.
While memecoins offer traders the opportunity to make large amounts of money in a short period of time, they are also very volatile and unstable. As such, they should be approached with caution.
Here’s what you need to know about memecoins, how they became popular, the risks involved and how to buy them yourself.
What is a memecoin?
What exactly is a memecoin? Memecoins – AKA “shit coins” – are a cryptocurrency created and promoted around a popular internet meme or cultural trend. The appeal of memecoins lies in their fun and light-hearted nature, as well as their potential for significant profits.
Memecoins are often created as a joke or as a way to mock the serious nature of traditional cryptocurrencies, but they can still have significant value if they gain a following. This has led to a large increase in memecoin trading and investment, with some investors making large returns.
What are some examples of memecoins?
Two of the most popular memecoins are Dogecoin and Pepe Coin. Dogecoin was started as a joke in 2013 by Billy Markus and Jackson Palmer, but has since grown into a major player in the cryptocurrency space. In May 2021, it soared to an all-time high of around $0.74, with a market cap of over $80 billion at its peak.
Inspired by the popular internet character Pepe the Frog, Pepe Coin recently made headlines when it reached a market cap of $1 billion and entered the top 100 cryptocurrencies in the market – all just three weeks after launch. The contract for the token was staked by an anonymous user and was originally popularized by posts on it official tweet.
Other notable memecoins include Shiba Inu (SHIB) and Akita Inu (AKITA).
Why are memecoins so popular?
One reason for the recent popularity of memecoins is the rise of social media and internet culture. Memes have become an important part of online communities and memecoins are a natural extension of this trend. The rise of Reddit communities, Discord channels and other online forums has made it easier than ever for memecoins to gain traction and attract investors.
Another reason for the popularity of memecoins is the desire for quick profits. While other coins like Ethereum and USDC take some time to appreciate in value, memecoins can see that big profits in a short time. According to Watcher Guru, if someone invested $1,000 in $PEPE on April 17, 2023, their tokens would be valued at $36,541 on May 3.
How to buy memecoins
Certain memecoins are not listed on exchanges. As a result, buying them can be tricky for those new to the space. Fortunately, the process of buying them is largely the same from coin to coin. To illustrate, we use $PEPE as an example.
First, make sure you have a wallet like Metamask or Coinbase Wallet. If you don’t already have one, buy Ethereum or transfer it to your wallet through another exchange. After you have the amount you want to exchange in ETH, open Uniswap.com and connect your wallet.
Copy and paste the token address from $PEPE 0x6982508145454Ce325dDbE47a25d4ec3d2311933 and select Pepe Coin. Double check that you have the correct coin and sign the transaction. Then enter the amount of ETH you want to trade and the amount of $PEPE will appear. Click on “Exchange” and sign the transaction.
After a few moments, your Pepe Coin should be in your wallet.
The same process applies to various memecoins; all you need to do is exchange the contract address of the token. For example, if you were to buy $TURBO, you can access the contract on etherscan.
Alternatively, certain memecoins, such as $SHIB or $DOGE, can be purchased directly on exchanges such as Coinbase. Similarly, you can buy $PEPE through OKX or Binance.
Risks and concerns
Ready to buy? Before doing this, it is important to remember that while memecoins can lead to quick profits, they are also subject to sudden price swings. This can make them risky investments and may not be suitable for everyone, especially those who are risk averse.
With every story you hear about someone who has made hundreds of thousands from a memecoin, there are also more people who have lost large amounts of money but simply do not advertise it on social media. In a thread NFT_Doctor33dozens of traders agreed with their losses to show that the crypto space is not all about steady gains and wins, but also setbacks.
As these memecoins continue to evolve, it will be interesting to observe their impact on the wider cryptocurrency market. Whether coins like PEPE maintain long-term success or eventually give way to another trend, they have already carved a place in NFT history as a major contributor to the crypto ecosystem.