Meme Coins: Know What Are They And The Risk Factors Involved In Buying Them

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Meme coins, as its name suggests, are a type of cryptocurrency inspired by memes

Although most people are familiar with Bitcoin and Ethereum, these two are not the only cryptocurrencies in circulation. Meme-based currencies have gained a massive following of late. Meme coins, as its name suggests, are a type of cryptocurrency inspired by memes, which are funny or humorous ideas captured in a photo, video, or other forms of media. Dogecoin and Shiba Inu are currently the most popular meme coins in the cryptocurrency world. These coins, though frequently made as a joke, have the potential to become mainstream. In 2021, for example, the value of Dogecoin skyrocketed manifold.

So, should meme coins be taken seriously?

Because many meme currencies have an infinite supply and their appeal is largely based on pop culture, they are extremely volatile and vulnerable to rapid price fluctuations.

The Doge meme, for example, was inspired by a viral photo of a Shiba Inu and led to the creation of Dogecoin. Although these cryptocurrencies aren't meant to be taken seriously, they can gain traction when members of the community buy into a coin to become a part of the joke.

How do meme coins become popular?

When a coin becomes popular and its value rises, ordinary investors may hop on board, further boosting its value. Famous internet figures and celebrities also help to enhance the popularity of various meme currencies. Tesla and SpaceX CEO Elon Musk is probably the most well-known example, and there's even a Dogecoin variant called Floki Inu named after Musk's pet dog.

Some meme coins are made solely to mock. Mongoose Coin was founded in December 2021 after a member of Congress coined the name during a discussion on digital currency.

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