Meme coins are an interesting concept sparking a lot of controversy. To an outsider, they look like a joke, a meme. However, there are a lot of people who made a serious profit both by trading them and by developing meme coins of their own.One thing that unites the entirety of the online community is the fact that the majority of people just don’t know enough about meme coins. So, in order to right this wrong (or to at least start doing this), here are the six biggest misconceptions about meme coins.
They lack value
One of the biggest misconceptions about meme coins is the idea that they lack value in order to become a tangible asset for a crypto investor. The easiest way to debunk this myth is to just look at some of the best representatives of this internet phenomenon and see their historic value change.The problem is that people who make these claims usually come from the position of observing these coins from the perspective of a dollar-value-average investment strategy. This means that they just compare the value difference in a single token instead of actually focusing on the percentage.Imagine if you bought an X amount of BTC (let’s say $100) and it ended up increasing by 30%. This would yield you a return on investment of $30 and it would be a monumental growth, at the current state of the market. At the same time, smaller, more volatile coins like meme coins can increase their value by thousands of percent. This means that this same amount of $100 could return far more.
They’re making promises that they can’t keep
The most interesting thing about meme coins is the fact that they’re completely upfront about their downsides. In fact, there’s no coin out there that’s more willing to admit their volatility and the fact that they might not amount to anything.Let’s face it, the majority of the crypto world is described as vaporware by skeptics. The most honest thing about meme coins is that they wouldn’t even bother to try and beat these allegations. So, why aren’t they fighting against these allegations? Because even if they were true, they wouldn’t change a thing. Regardless of all the skepticism, some meme coins are doing really well. This means that there’s enough empirical proof that this asset can be successful. For every logical argument against its structural weaknesses and flaws, there’s a successful meme coin that you can point to, as well as a person who made a fortune on it. You have to appreciate the honesty.You can also see this same level of honesty in the offshore casino industry, where you understand that the risks are high but so are the potential rewards.
They lack utility
Meme coins may not have utility in a traditional sense, but this doesn’t mean that they lack utility altogether.
For instance, they’re pivotal when it comes to community building. Even in this day and age, humans are social beings, and belonging to a brand or being focused on the same type of coin could make a huge difference. Another use for utility coins is one of raising awareness (especially in the field of crypto). A lot of people have no idea about the world of crypto or what it represents and this could serve as a fun introduction to the crypto world.Lastly, they can be used as an educational tool. This is especially the case when you’re trying to showcase how the crypto market (in general) works. In other words, this could benefit the world of crypto as a whole.
They’ll always perform worse than major cryptos
You can’t just look at the value of the coin and use this as the determiner if they’re doing well or not. The problem with this kind of outlook is that it doesn’t really paint the whole picture. Sure, BTC is bigger than a meme coin like WIF (dogwifhat), however, there are fronts where WIF is outperforming it. Still, we’re saying some fronts since there are aspects in which BTC is clearly superior. For instance, even though WIF withstood the market dump better than BTC, bitcoin held its value better than its smaller counterpart. Seeing as how the value of WIF is so low compared to BTC, a smaller shift in price will always be a larger percentual increase or decrease. This is something that you just have to get to terms with. The key thing to remember is that volatility is just a state that the asset is in. It’s neither good nor bad. Just ask people who bought BTC prior to 2017 and held, if it’s bad when the asset is volatile and see what they tell you.
The fact that they’re uncapped is a huge problem
The biggest problem with meme coins is that they don’t have a cap, like traditional cryptocurrencies. There’s the potential for an unlimited number of meme coins to be created, which concerns a lot of people; however, this fear is, for the most part, baseless.How so?Fiat currencies don’t have a cap, yet, no one sees this as that big of a problem. Sure, there are talks of inflation every now and then but every time the inflation is brought up, it’s always the story about the factors that cause it, not the idea that it’s even possible due to the lack of a market cap. In other words, worrying about this, while logical, is a bit hypocritical.Second, while major cryptocurrencies do have a coin cap, you have an option of buying fractions of these cryptocurrencies, which defeats the purpose of having a cap, to begin with. How so? Well, because you can split a single coin indefinitely, so what’s the difference?Don’t get us wrong, meme coins have some pretty significant problems but the lack of coin cap is not one of them.
Their value is driven by traditional economic factors
Ultimately, the value of these coins is not determined by traditional economic factors; however, this doesn’t mean that they don’t abide by the laws of the free market. The factor that significantly impacts their value and growth is their social media presence. After all, this is one of the simplest and most organic ways of spreading the word about these coins.Another thing that could have a pretty significant impact is the celebrity endorsement. Keeping an eye out for any celebrities who are vocal about meme coins usually means that more people will hear about it than before. Some of these celebrities have a disproportionally large reach and could affect the market significantly. The advantage is that these are things that you can actually research. Let’s face it: you’re not a financial expert, and you don’t have the skillset needed to do major market research. On the other hand, you don’t have to be an expert to engage in an elaborate social media monitoring campaign. All you need is the right app.
In 2024, no one is laughing at the concept of meme coins
While it may sound like a joke, meme coins have a certain amount of value that keeps growing with each passing week. They have a greater utility than they’re given credit for, greater value than what people would expect, and are known, on some occasions, to even outperform some of the biggest coins on the market. In other words, they’re definitely worth keeping an eye out for.
