After Bitcoin skyrocketed and generated enormous returns for early investors, millions now seek to replicate its success by finding the next big investment opportunity.

Cryptocurrencies have remained strong despite experiencing a huge drop at the beginning of last year. However, finding the next Bitcoin is challenging, as the market has become highly competitive. While Bitcoin was the first cryptocurrency on the market, there are over 24,000 cryptocurrencies, with new ones being added daily. People are spreading their investments across different tokens, and every token has yet to manage to grow as big as Bitcoin. There are different types of cryptocurrencies, including basic, governance, utility, and meme tokens, which we will discuss in this article.

After Elon Musk tweeted about Dogecoin, its value skyrocketed and became one of the most popular cryptocurrencies. This led to a surge in interest in meme tokens as potential investment opportunities. However, are these tokens worth investing in? To answer this question, let’s examine what meme tokens are and examine their potential as an investment.

What are meme tokens?

Meme tokens are a type of cryptocurrency titled “meme” due to the reason they were created and the concept they carry. These tokens are created for the sole purpose of making fun of something and do not have any long-term goals or serious plans for the future. For instance, Dogecoin, the largest meme token, was created in 2013 to poke fun at speculators when Bitcoin was experiencing significant growth. Cryptocurrencies are already speculative assets, and meme tokens take it even further, as most do not carry any value within the crypto space.

Recently, Dogecoin and Shiba Inu have gained immense popularity and become two of the largest cryptocurrencies in the market. Following their success, many meme tokens have emerged in the crypto space. With the advancements in the crypto industry, creating a new cryptocurrency has become extremely easy, even for those with zero prior experience. This has enabled anyone to create their meme token within a few hours. But the question remains – are these meme tokens worth investing in?

Should we invest in meme tokens?

Meme tokens are named so because they are typically created to poke fun at something. However, two meme tokens, Dogecoin and Shiba Inu, have made it to the top 10 cryptocurrencies by market capitalization list. This raises the question of whether there is more to these tokens than just a joke. Should we consider investing in them? Generally speaking, investing in meme tokens is not recommended. However, there may be other factors to consider.

Meme tokens have gained notoriety for their association with pump-and-dump schemes similar to those found in Forex and Stocks. The creators of these tokens generate hype around them to entice people to buy the crypto. Once the prices rise, the creators, who hold significant tokens, sell their shares, earning big profits. This, in turn, causes the token’s value to plummet, rendering it irrelevant.

Meme tokens are closely tied to social media trends and famous active individuals on these platforms. For instance, Dogecoin would not have become one of the most popular cryptocurrencies on the market if Elon Musk had not tweeted several times about his fondness for the token. As Musk commented on the token, the same is true for Shiba Inu, and its value skyrocketed. However, this is not unique to these two cryptocurrencies alone, as other tokens have experienced a rise in value, only to drop sharply soon after. For example, a while ago, Vitalik Buterin, the creator of Ethereum, posted a photo of himself wearing sports pants, and his private parts were visible. Within a few hours of the picture being seen, a cryptocurrency was created and traded based on Buterin’s private parts, gaining significant value. However, it soon dropped significantly in value after a few hours.

Meme tokens are difficult to value accurately as they rely on trends and popular culture. Therefore, investing in a meme token that has already gained popularity is not advisable, as it has likely reached its peak and is unlikely to reach those same highs again.

Interestingly, Dogecoin and Shiba Inu managed to survive the recent decline in the popularity of meme tokens. However, the reason behind their success is quite clear. The creators of both cryptocurrencies did not solely rely on the meme aspect of their tokens but instead treated them as legitimate cryptocurrencies. Dogecoin, for instance, has its blockchain and is widely used as a decentralized peer-to-peer cryptocurrency. Similarly, Shiba Inu created its metaverse and takes its development very seriously. Although it is unlikely that these tokens will reach their peak levels of popularity again, particularly Shiba Inu, investing in them could be a worthwhile addition to your investment portfolio. It is important to note that other meme tokens are usually not a wise investment choice.

How do you take advantage of meme tokens?

Although it is not recommended to invest in meme tokens, there are still opportunities to benefit from them. Meme tokens are frequently involved in pump-and-dump schemes, where individuals create tokens related to trending topics, and once the price increases, they sell to earn profits, causing the value of the tokens to plummet.

If you’re looking to profit from meme tokens, you can take advantage of the tokens that have recently started to gain value. However, this type of trading should be approached with caution. It’s important to avoid buying into meme tokens at the end of their value spike. To limit potential losses, be sure to have take-profit and stop-loss orders in place. Remember that investing in meme tokens is risky and should only be done with money you can afford to lose.

FAQs on whether you should invest in meme tokens

Do meme tokens have a future?

Meme tokens are unlikely to have a bright future if they continue to be associated with their meme status. Dogecoin and Shiba Inu, the two largest meme tokens, stand out. They have taken a professional approach and transformed their tokens to have a more realistic and practical application rather than being used for memes. Other meme tokens that have yet to follow suit and continue to be associated with memes will likely not succeed and remain at the bottom of the crypto market hierarchy.

Can you make money from meme crypto?

If you’re considering investing in meme tokens, it’s important to know that they are often used for pump-and-dump schemes. However, there is a way to make money from these tokens. You can look for a meme token that is just gaining popularity, but its price has yet to skyrocket—buying and selling this token shortly after can be a good and fast way to profit. However, it’s crucial to have damage control mechanisms, such as take-profit and stop-loss orders, to ensure you don’t lose your money. We recommend that you only invest in meme tokens with money you are prepared to lose and never invest an amount of money that would significantly impact your life if lost.