Meme Tokens: The Good, The Bad and The Ugly | Finance Magnates

There are many reasons why meme tokens are special. The biggest peculiarity of meme coins is that they are based on a joke and in most cases represent a knock-off of a well-known cryptocurrency.

However, by developing a community and igniting hype, meme tokens can also develop into serious crypto projects. The community aspect in particular plays a decisive role with these cryptocurrencies. Only an active and broad community can ensure the success of a meme token and thus increase its value.

The example of Dogecoins makes it clear that an established and valuable project can arise from a little fun. The cryptocurrency was originally developed as a critique of cryptocurrencies like Bitcoin and to show that these new cryptocurrencies are worthless.  

Price Fluctuation Of Meme Tokens

Dogecoin has established itself in the top 20 coins and has a market capitalization of several billion US dollars. Another special feature of meme coins can be seen in the performance. Many meme coins show strong price fluctuations. The price fluctuations are mainly based on hypes and not on any fundamental values.

A meme token forecast is a difficult undertaking because these cryptocurrencies often have no fundamental values, but “only” live from a community and their interest in the cryptocurrency.

If you look at the past, however, it also becomes clear that meme coins have developed excellently in some cases and that some of these cryptocurrencies therefore also have great potential.

We, therefore, assume that there will also be meme tokens in the future, which will develop very positively and bring high profits to some investors. However, due to a large number of meme coins, it is difficult to find out which cryptocurrency will have a positive development.  

In addition to a large number of meme currencies available, the random factor also plays an important role. Nobody could have expected in the past that Elon Musk would comment positively on Dogecoin. Based on this example, it becomes clear that a meme token forecast is a difficult task.

However, investors should keep in mind that these profits are not guaranteed and losses can also be high. In addition to the investors who were able to achieve high returns, there are also a large number of investors who have lost large sums of money investing in meme coins.

Therefore, whether an investor should invest in meme tokens or not largely depends on their risk appetite. Investments in these meme cryptocurrencies could be interesting, especially for investors willing to take risks. Risk-averse investors, on the other hand, should be more concerned with other cryptocurrencies and asset classes. With every investment in meme coins, the principle is that only capital whose loss can be managed should be invested.

How do meme tokens work and what technology is behind them?

Meme coins are cryptocurrencies based on blockchain technology. In most cases, meme coins are copies or clones of existing cryptocurrencies. When creating meme cryptos, developers copy the source code of an existing cryptocurrency and create a new cryptocurrency. For example, Dogecoin uses the Bitcoin code, while Shiba Inu uses the Ethereum code.

From a technical point of view, most meme cryptocurrencies are therefore not independently developed projects, but merely copies of existing cryptocurrencies. Occasionally, the code of the meme coins is modified later on, so that the meme coins differ in part from their original cryptocurrencies.  

From a purely technological point of view, it becomes clear that basically anyone can create their own cryptocurrency. However, just because meme tokens are not special from a technological point of view does not mean that they are completely worthless. Through the consistent development of a community and your own adjustments to the existing technology, independent and valuable projects can arise from former copies.

Read More About: What is a MEME Token?

Buying Meme Coins – what to look out for

Before buying a meme token, consider the following points, among others:

• Find out your risk tolerance

• Understand the respective project & know the risks

• Determine the holding period and the investment amount

• Select the right vendor for purchase

• Specify the time of sale at the time of purchase

• Storage of cryptocurrencies in a meme coin wallet

A good analysis of the crypto market and the price fluctuation of meme tokens can put you in a good position to make a decision that which meme token to buy. So be informed, and make calculated and educated decisions when investing in any cryptocurrency.