This article examines the risks and rewards of trading memecoins, a highly speculative category of cryptocurrency. It analyzes the factors driving memecoin volatility, the potential for tokenized rug pulls, and the importance of community and virality in determining their value. The article also discusses the case of TRUMP coin, a memecoin tied to the presidency, and compares it to other memecoins like DOGE and SHIB.
According to Coingecko, memecoins now make up $102 billion market cap out of the total cryptocurrency market cap of $3.62 trillion. Most of the memecoins are still heavily dog-theme concentrated headed by coin shows a new trend emerging since its launch on January 18th. Alongside seven other memecoins above $1 billion market cap, DOGE , SHIB and TRUMP are now the top three picks among 1,362 digital assets in this highly speculative meme category.
But now that Bitcoin is heavy, at a $2.1 trillion market cap, it is much harder to move that weight, making it less volatile. Memecoins picked the volatility slack and then some. Unlike Bitcoin, which aims to solve the problem of sound money through its computing network to ensure inviolability and scarcity, memecoins lack substance., memecoins also typically have high volatility, driven by short-term speculation and low liquidity.
This is why memecoin trading should be viewed as tokenized gambling, with the house being the most likely winners. But, is there a way to offset memecoins’ volatility and make it lucrative?Did you ever encounter an image that you liked on social media, as it stated some repeatable, concise, seemingly profound message? Add a blockchain code to it and you get a memecoin in a nutshell.
In the case of Haliey Welch’s memecoin, HAWK tokenholders conflated strong community with astroturfed social media engagement, built from the initial organic wide appeal. As a result, many served as exit liquidity. At the same time, this doesn’t apply to the TRUMP coin because President Trump is not just any persona. He has the weight of the White House behind him, attached to all the expectations and speculations that come with such a lofty position of power.
Nonetheless, memecoin investors should always conduct due diligence and see the memecoin’s tokenomics and supply unlocks. This verification is one of the key benefits of blockchain technology that should be leveraged.
CRYPTOCURRENCY MEMECOINS RISK VOLATILITY TRUMP DOGE SHIB TOKENOMICS
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