Dogecoin was introduced as a joke in December 2013. As it gained popularity over the years, it now leads the way for a new category of crypto – the meme coins. These are cryptocurrencies that can be associated with a pop culture references or internet jokes.
Most meme coins revolve around popular dog breeds such as the Japanese Shiba Inu. These dog-themed coins are well-known to retail investors. For instance, Dogecoin has gained a huge following over the years. This has prompted a number of copycats, including Dogecoin derivatives Shiba Inu, Dogelon Mars, and Samoyedcoin. While the unit price of these meme coins is not very high, they have become mainstream. But can investors take these meme coins seriously?
How to Trade Meme Coins - Quick Guide
- Open a trading account if you want to trade on meme coin prices, either “going long” if you think the price will increase or “going short” if you think the price will decrease.
- Find a crypto exchange if you want to buy and hold meme coins. Unlike trading crypto through a brokerage, the information that you need to access your cryptocurrency is held in a digital wallet.
- You can get exposure to Meme through companies that are already thriving but whose growth is expected to be boosted by blockchain and Web3. For a broader exposure consider a Meme ETF.
What are Meme Crypto Coins?
Meme coins, like the memes that they are based on, have been designed to spread virally and be shared. Usually, they are represented through funny pictures. The most famous meme coins available today are dog-themed coins (Dogecoin, Shiba Inu, and Dogelon Mars).
Dogecoin is one of the most popular meme coins on the market. Jackson Palmer and Billy Markus, both software engineers, created it as a joke to mock Bitcoin and other mainstream cryptocurrencies. However, just like other cryptos, meme coins can be used for trading and other actions. In 2021, the market saw an incredible pump of these meme coins when DOGE’s price surged by over 12,800% in only five months, reaching an all-time high of $0.7376 by May 8th. However, during the crypto bear market started in November 2022, Dogecoin has fallen 91% from its all-time high.
Since meme coins have been around for a while now, here are a few characteristics of most of these meme crypto coins:
- High or even unlimited coin supply, up to billions. Meme coins don’t have a mechanism to burn coins, so the numbers always go up.
- Since the supply is very high, the individual unit price is low
- Anyone can create a meme coin, and you can easily find software to create it for you.
- Meme coins aren’t designed as a utility token
- Meme coins are highly volatile
Are Meme Coins a Good Investment?
Are you looking to invest in meme coins? If so, then you should know that you will be dealing with a more volatile class of cryptocurrencies. Since Dogecoin became an international meme coin, thanks to the power of the internet (and Elon Musk), many others have started to appear.
But 2022 is the year of a bear market. Dogecoin, the most famous meme coin of all, dropped by more than 90% from its all-time high. While the top meme coins are still holding up, other less-known coins are disappearing.
Investors should always be aware of the highly volatile nature of cryptocurrencies. This is especially true for meme coins, which may have an unlimited supply. For instance, Dogecoin has a circulating supply of 132 billion DOGE, and 10,000 new DOGES are created every minute as a reward for miners.
You should know that you will be dealing with a more volatile class of cryptocurrencies if you are looking to diversify your mem coin portfolio beyond Dogecoin or Shiba Inu.
Also, these meme-based cryptocurrencies are not considered serious or substantive projects. They are often created by copying code from top cryptocurrencies. These cryptocurrencies are also less secure than other types of cryptocurrencies and lack significant developer communities that help keep them up to date. Dogecoin's development has been at risk at different times throughout its history.
Many meme coins are also owned by small groups who have large quantities and market-moving liquidity. Their prices are highly volatile due to social media sentiments, "FOMO" (fear of missing out), and other factors. Meme coins are vulnerable to pump-and-dump schemes. This is where a large group or individual of coin holders hypes up the coin and gets others to buy it before inflating the price.
Although a particular group or individual may make significant returns, a quick sale can cause the market to go into freefall. Investors who believe that the price of coins will rise will be disappointed when they end up with tokens worth much less than they originally paid.
What are the most popular Meme coins?
Meme coins are some of the most popular crypto assets, and even popular public figures have backed these cryptocurrencies. There are many options available, but it can be difficult to find the best meme coins to invest in, especially if you're new to this space. Here’s a list of the top meme coins.
- Market capitalization: $9,494,104,344
- Circulating supply: 132.67 billion DOGE
- All-Time High: $0.7376 (May 8th, 2021)
Dogecoin was created in 2013, and it is the most popular meme coin. It was intended to be a joke about the rapid growth of Bitcoin and altcoins. However, today Dogecoin is one of the top cryptos, and many businesses are accepting DOGE as payment.
Dogecoin is dominating the meme crypto ecosystem. In 2021, billionaire entrepreneur Elon Musk, CEO of Tesla and SpaceX, promoted Dogecoin on social media, and it drove the price of the meme coin up to $0.73.
Although Dogecoin has fallen from its 2021 peak, the digital token remains one of the most popular 20 meme coins worldwide. Dogecoin continues to be popular and has seen widespread adoption.
Shiba Inu (SHIB)
- Market capitalization: $6,838,535,912
- Circulating supply: 549,063.28 billion SHIB
- All-Time High: $0.00008845 (October 28th, 2021)
Shiba Inu was launched in late 2020, and it is an experiment by the anonymous Ryoshi. This meme coin is an attempt to overthrow Dogecoin and make Shiba Inu the most popular meme coin for cryptocurrency investors. Shiba Inu has received the nickname "Dogecoin killer".
To keep investors interested in the project, the Shiba team has been developing several use cases. Users can use the DeFi platform ShibaSwap for crypto trading. One of the latest is a venture into the Metaverse. According to its website, Shiba Inu plans to create virtual real estate called Shiba Lands.
Baby Doge Coin (BabyDoge)
- Market capitalization: $187,418,191
- Circulating supply: 115,113,333.04 billion BabyDoge
- All-Time High: $0.00000002 (July 4th, 2021)
The Baby Doge Coin project was launched in 2021, and it uses the BSC (Binance Smart Chain) blockchain. As the name entails, the project was inspired by the famous Dogecoin, which became a meme token trend after its 2021 bull run.
As with most of these meme coins, the purpose of BabyDoge is to empower individuals with the power of cryptocurrencies and to help dogs in need. The team claims that they are donating to NGOs working for animal welfare.
Dogelon Mars (ELON)
- Market capitalization: $182,005,998
- Circulating supply: 548,083.39 billion ELON
- All-Time High: $0.00003263 (July 31st, 2021)
Dogelon Mars (ELON) is another of many dog-themed coins. It was launched on April 23rd, 2021. ELON's mascot is not only a cryptocurrency but also an NFT (Non-Fungible Token).
The team behind ELON sent half the token supply to Vitalik Buterin, who donated approximately 43% of ELON tokens to the Methuselah Foundation. In May 2021, the foundation committed to not selling the tokens for one year to help increase ELON's value over the long term.
Floki Inu (FLOKI)
- Market capitalization: $142,782,262
- Circulating supply: 9,318.01 billion FLOKI (self-reported)
- All-Time High: $0.0003437 (November 4th, 2021)
Floki Inu was launched in 2021, after the massive success of Dogecoin. According to its whitepaper, the Floki ecosystem is powered by its community and aims to offer four key offerings. These represent the main use cases for the Floki Inu token:
- the Valhalla NFT Metaverse Game;
- the Floki University Crypto Education platform;
- the FlokiPlaces.
Floki University refers to an educational resource that will be created to overcome the crypto education gap while creating awareness for the FLOKI token. FLOKI exists on the Ethereum and BSC (Binance Smart Chain) blockchains.
- Market capitalization: $61,476,745
- Circulating supply: 3.66 billion SAMO
- All-Time High: $0.246 (October 29th, 2021)
Samoyed Coin is a popular meme currency on the Solana blockchain stables. Sam Bankman-Fried, owner of FTX crypto exchange and a famous Solana supporter, and Anatoly Yakovenko, Solana’s co-founder, launched Samoyed Coin in 2021. Because of its core mission to onboard more people into the crypto space with a fun-themed digital asset, the Samoyed Coin is a well-known meme coin on the Solana Blockchain as well as on the broader crypto market.
The main goal of the SAMO meme coin is to bring new Solana users in, educate market participants and create personal connections. It also helps token holders maximize their potential returns. Samoyed coin is the public face of meme coins on Solana and has been a rising meme star in 2021.
- Market capitalization: $36,393,567
- Circulating supply: 65,729,674.87 MONA
- All-Time High: $20.23 (December 6th, 2017)
MonaCoin is one of the oldest meme crypto assets that you will find. The famous meme coin was launched in Japan in late 2013. It has a strong community in Japan. The open-source, decentralized meme project operates on a peer-to-peer (P2P) network. MonaCoin is a fork of Bitcoin fork Litecoin. It uses an algorithm called Lyra2RE(v2).
MonaCoin's main benefits include its 1.5-minute transaction processing time and the dedicated, vibrant community. Japan was the first country to adopt a meme coin after a television commercial.
After its 2017 bull run, MONA’s price went on a downtrend, and it hasn’t recovered.
- Market capitalization: $34,805,766
- Circulating supply: 40,192,158.06 billion PIT
- All-Time High: $0.00000001 (April 15th, 2021)
Pitbull (PIT) is another community-driven meme coin with a dog-themed theme that exists on the BSC (Binance Smart Chain). The Pitbull community is made up of volunteers and wants to become an inspirational model for community-driven cryptocurrency projects. They are proud of the project and call it a “unique social experiment”, and it tried to attract new investors to the community.
Pitbull rewards investors with an auto-staking system, which ensures passive yield and pays token holders fees for transactions in PIT. Another incentive to hold Pitbull is that 2% of each transaction is distributed to all holders.
Where to trade Meme coins?
Before trading meme coins, the first thing to do is research and choose the best crypto app for you. You will find many services online to help you buy, sell, and trade cryptocurrency, including crypto exchanges and online brokers.
There are a few online brokers that offer ways to buy and sell meme coins, in addition to other assets like stocks, forex, and ETFs. These trading platforms tend to offer lower trading costs but fewer crypto features.
You'll have many cryptocurrency exchanges to choose from, each with varying offerings of cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees.
Find the Best Online Broker Find the Best Crypto Exchange
As you're comparing different platforms, it's wise to consider things like supported cryptocurrencies, security features, fees, storage and withdrawal options, and educational resources.
Using a brokerage may be a suitable option for higher trades due to several reasons, such as security and significant liquidity. After depositing your collateral, you have various trading possibilities, including leverage positions and a variety of assets. All these instruments are available on the same trading platform, but each specific broker might offer different trading instruments.
Another way to trade meme coins is to use a cryptocurrency exchange. These are platforms that use an order book mechanism for each trading pair. This is the way a buyer meets a seller, and the crypto exchange charges a fee.
When compared to cryptocurrency exchanges, traders might find brokers to be more useful for trading. That’s because online brokers offer cryptocurrencies in addition to their selection of stocks, ETFs, options, bonds, and mutual funds. Crypto investors can use a diversity of investment vehicles that provide exposure to the crypto market and blockchain technology.
Another big advantage of using online brokers is that investors can trade and speculate on the value of the assets as it moves in both directions. This means that there is a possibility to make a profit even if the meme coin prices go down if you had opened a sell position. However, if the price moves up, you lose your investment. This is not the case with cryptocurrency exchanges, which do not offer the option to speculate on the price movement, and traders must wait for the price to move in only one direction.
Unlike buying meme coins in the hope they increase in value, CFDs (contracts for difference) enable crypto traders to speculate on cryptocurrency prices, either “going long” if they think the price will increase or “going short” if they think the price will decrease.
CFD trading is leveraged, which means you can gain exposure to a large position without having to commit the full cost at the outset.
While leverage enables you to spread your capital further, it is important to keep in mind that your profit or loss will still be calculated on the full size of your position.
When you open an account with CAPEX, you will be able to:
- Open buy and sell positions. With cryptocurrency CFDs, you can speculate on any price movement (up or down).
- Trade multiple individual cryptocurrency CFDs at the same time.
- Diversify your portfolio by trading CFDs on other assets (crypto, stocks, bonds, currencies, ETFs and commodities).
- You can start off with a demo account funded with $50,000 virtual cash to allow you to practice risk-free trading before you use any real money.
How to trade Meme coins?
If you want to buy and hold meme coins, then you can use a cryptocurrency exchange. However, if you want to speculate on the meme coins’ price movements, you can use an online broker that offers crypto CFDs.
Here is how to buy meme tokens through an exchange or trade CFDs on coins with an online broker:
- Choose which type of platform you want to use. Your first concern should be to find a reputable online broker that has a wide range of cryptos and other assets, including stocks and ETFs. If you want to withdraw your cryptos to a private wallet and keep it for longer, you should consider using a crypto exchange.
- Create an account. Regardless of your chosen platform, you need to register and complete the KYC process to verify your identity.
- Fund your account with fiat money. Before buying and trading any crypto, you need to fund your exchange account with U.S. dollars, Euros, or any supported fiat currency on that platform.
- Select your cryptocurrencies. It’s time to decide on your first cryptocurrency investment. We strongly recommend that you thoroughly research the project behind the coins you want to add to your portfolio. You can invest in one or more cryptos.
- Place a buy order for your chosen cryptocurrency. Follow the steps required by the trading platform to submit and complete a buy order for one or more cryptocurrencies.
After your purchase is complete, the information needed to access your cryptocurrency is held in a digital wallet. That crypto wallet can be hosted either by the cryptocurrency exchange or an independent wallet provider.
When trading crypto, the CFDs (contracts for difference) are stored in your account and are far more liquid. However, you should be aware that CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading CFDs. There are liquidity risks and margins you need to maintain; if you cannot cover reductions in values, your provider may close your position, and you'll have to meet the loss no matter what subsequently happens to the underlying asset.
With CAPEX, you can trade CFDs on 22 cryptocurrencies and other cryptocurrency assets like stocks, ETFs, and Blockchain Future TematiX.
Are meme coins the best investment for you?
It is possible to make money by investing in meme coins. However, that's not a guarantee. These cryptocurrencies can fall in value quickly and are more volatile than mainstream cryptocurrencies.
Do your research, just like you would with any other investment. Beware if the coin's background is not clear and it is difficult to find information. Even the most popular digital currency can end up being a fraud. A whitepaper without a clear ecosystem or a whitepaper that is not well-written can be a red flag.
You can still purchase a lot with very little investment, considering how cheap meme cryptocurrencies are. You can expect only a small return on your investment. No matter what you do, don't spend more than you can afford.
Free trading tools and resources
Remember, you should have some trading experience and knowledge before you decide to trade cryptocurrencies. You should consider using the educational resources we offer like CAPEX Academy or a demo trading account. CAPEX Academy has lots of free cryptocurrency courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better crypto trader.
Our demo account is a great place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for investors who are looking to make a transition to leveraged trading.