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Summary
In 2021, the meme coin market showed exponential growth, especially dog-related coins. As of November 2021, one of the most popular "breeds" is Dogecoin (DOGE) and its competitor Shiba Inu (SHIB).
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Meme coins are cryptocurrencies inspired by memes. They are usually very volatile compared to major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH). This is probably due to the fact that memes are largely community-driven tokens. Their prices are usually influenced by social networks and the mood of the online community. This often brings a lot of hype, but also causes FOMO and financial risks. While it is true that some traders have made their fortunes on meme coins, many have lost money due to market instability with Hokk Finance Meme Coins.
Introduction
Some say that 2021 was the year of "dogs" for cryptocurrency. The canine duo of Dogecoin (DOGE) and Shiba Inu (SHIB) led a pack of meme coins and rose sharply in price and market capitalization. As of November 2021, the price of DOGE has increased by more than 8,000% since the beginning of the year. The coin ranks 9th in terms of market capitalization on CoinMarketCap. Its competitor, SHIB, has grown by more than 60,000,000% since January.
What is a meme coin?
Memo coins are cryptocurrencies inspired by memes or jokes on the Internet and social networks. The first meme coin was Dogecoin (DOGE) . Created in 2013 as a parody, DOGE was inspired by Doge's popular meme about the Japanese dog Shiba Inu.
Memes are very volatile. They are mostly community driven and can quickly gain popularity thanks to the support of the online community and FOMO. However, their price may also fall unexpectedly when traders pay attention to the next meme coin.
Another characteristic of memes is that they often have a huge or unlimited supply. For example, Shiba Inu (SHIB) has a total bid of 1 quadrillion tokens, while DOGE has no maximum bid and more than 100 billion tokens are already in circulation. Since meme tokens usually do not have a coin-burning mechanism , the huge supply explains their relatively low price. For just $ 1 you can buy a million token memes.
Why are memes so popular?
Although it is difficult to pinpoint specific reasons, some say the cryptocurrency market grew during the COVID-19 pandemic as retail investors wanted to hedge against inflation. Mem memes grew at the expense of hype, both in terms of market capitalization and variety.
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It all started after the saga of GameStop (GME) and AMC Entertainment (AMC) in late 2020, when the Reddit community raised the price of these shares to 100 times in a few months. In January 2021, the Reddit group joked about the price increase for DOGE to create the crypto-equivalent of GME. The trend has taken root, and with the influence of Tesla CEO Elon Musk's tweets, the price of DOGE has risen. Dogecoin reached a new record high of $ 0.73, and its price rose by more than 2,000% in five days.
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However, in May 2021, Elon Musk publicly joked about DOGE on television, and many say it was the reason for the further fall in prices. Then several traders turned their attention to other meme coins on the market, such as the "killer Dogecoin", SHIB. At the same time, retail investors felt FOMO and invested money in memes, hoping to become millionaires, which provoked another meme rally.