Meme Coins Are Slowly Dominating the Crypto Space—Here’s Why

2021 is the year of meme coins. As they saw tremendous growth this year, the meme coin market continues to gain traction within the crypto world. The skyrocketing popularity of Dogecoin (DOGE) and its rival Shiba Inu (SHIB) is a testament to this fact.

What are Meme Coins?

Meme coins are cryptos that take inspiration from jokes or memes trending on the internet and social media. The first meme coin was launched in 2013, DOGE. It took inspiration from the popular Doge meme of a Japanese Shiba Inu dog.

In contrast to major cryptos like Bitcoin (BTC), meme coins are highly volatile. This is likely because these kinds of cryptocurrencies are primarily community-driven. Their prices are commonly influenced by social media and FOMO, which means they can either jump or slump overnight.

In addition, meme cryptos have an abundant to an unlimited amount of supply. For example, DOGE has no maximum supply, and SHIB has 1 quadrillion tokens. Without a coin-burning mechanism, their large supply maintains its relatively low prices.

When did the Meme Coin Hype Start?

The overwhelming demand for meme coins started during the COVID-19 pandemic. It began in late 2020, right after the “meme stock” saga of AMC Entertainment (AMC) and GameStop (GME). In this stunt, the Reddit community pushed the prices of these shares to as much as 100 times.

A few months later, a Reddit group joked about creating a crypto equivalent of GME–pumping the price of DOGE. The trend then caught on that even Tesla CEO Elon Musk tweeted about this. As a result, DOGE price rallied. It reached a new ATH of $0.73, having an increase of more than 2000% in just five days.

However, in May 2021, Elon Musk made a joke about DOGE on national television and some say it was the cause of the following price drop. In turn, traders diverted their attention to other meme coins in the market such as SHIB.

Famous Meme Coins in the Market

Dogecoin (DOGE)

Created in 2013 by software engineers Jackson Palmer and Billy Markus, DOGE was inspired by a meme of a Shiba Inu dog.Because it is a fork of Litecoin (LTC), DOGE adopts the same Proof-of-Work (POW) mechanism and has no supply limit.

Shiba Inu (SHIB)

Shiba Inu is the main competitor of DOGE and it is frequently referred to as the “Dogecoin Killer”. Like DOGE, its name also took after a Japanese dog breed. An anonymous developer by the name Ryoshi created it in August 2020.

Unlike DOGE, SHIB has a limited token supply of 1 quadrillion tokens, of which half were burnt and donated to charity. Furthermore, SHIB’s ecosystem also has a decentralized exchange, NFTs, an NFT art incubator, and an NFT game.

Dogelon Mars (ELON)

From the name itself, ELON is named after Tesla CEO Elon Musk and his company SpaceX. This coin is a fork of Dogecoin and currently has 557 trillion tokens in circulation. Since its launch in April 2021, ELON has increased by over 3,780%.

Risks Coupled with Meme Coins

As mentioned earlier, meme coins are highly volatile. This means that these kinds of coins are vulnerable to unexpected pumps and dumps. It can soar up to the moon or crash unexpectedly, depending on what the online community says.

It is also important to note that as the meme crypto market continues to expand, scammers are taking advantage of the hype. Traders are extremely encouraged to DYOR before trading and investing in meme coins.

Source: https://coinquora.com/meme-coins-are-slowly-dominating-the-crypto-space-heres-why/