Some pretty savvy investors invest in memecoins despite being considered laughable by experts, looking for quick profits and really embarrassing many users.
The memecoins or meme cryptocurrencies—with some as famous as Shiba Inu or Dogecoin—emerged as a parody or satire of traditional cryptocurrencies such as Bitcoin. They were created as a joke amongst the experts though they have eventually caught on in internet communities as a meme phenomenon in its own right.
As you probably already know and unlike the best-known cryptocurrencies, the memecoins generally lack real value or sound economic foundations. Its value is based more on perception, trends, speculation and even, as has happened at times, Elon Musk’s tweets.
This has always made them an object of ridicule and amusement instead of being taken seriously as a smart form of investment, especially among those who really know the sector.
An investor in cryptocurrencies based on memes from Toronto, Canada has now wanted to leave his opinion about them in an interview for Wired.
‘I think it’s funny, that’s all!’
Using the name Ace as a safe nickname to avoid controversy, he has been buying and selling meme cryptocurrency for years as Dogecoin. “Everyone knew it was a joke”says Ace, “and yet almost 5 million people accepted it.”
Investors like Ace have rushed to ride the wave and invest in precisely these types of coins. Smelling that opportunity given the grace that makes many buyers invest in new tokens such as the one that was born in April, PEPE, they have seen their objective clearly.
The same was true of Floki Inu, a cryptocurrency named after Musk’s dog, a Shiba Inu, the breed depicted in the Doge meme. “Musk became the meta”, explains B, another interviewee who prefers to remain anonymous. “An army of believers came together, hoping Floki Inu would be the next big thing”.
The truth is that both Ace, B, or others can be considered as savvy investors. Many of them are looking for quick profits due to the volatility of the memecoins. They take advantage of price fluctuations to buy very cheap and sell when the value increases rapidly due to the simple culture of the Internet and the grace of the news that there is a Pepe the frog token on Twitter
“Meme coins are supposed to defy rationality. The ideal target investor is irrational people”they say. “You have to look at the most irrational meme that will attract the most irrational people, the most cult-like followers.”.
However, It is important to note that investing in memecoins involves quite high risks. Due to its purely Internet nature and its more than extreme volatility, investors can lose part or all of their investment if the value crashes, as the Shiba Inu has on occasion.