The Truth About Meme Coin Investment: Finding a Smart Investment Method Between Success and Failure
In the cryptocurrency market, 'Meme Coin' is no longer just a light joke. Beyond being a simple internet fad, memecoins are receiving a lot of attention from investors as cases of actual profits of hundreds or thousands of times have emerged.
However, there are also many failure cases, and they are considered a representative of 'high risk, high return'. The memecoin market is an extreme world where one can become a millionaire overnight with a single mention on social media, or conversely, lose all of one's investment.
In this post, we will explain in detail the concept of memecoins, representative success and failure cases, and the criteria you must know before investing. If you are considering investing, please read through to the end.
1. What is memecoin? A new investment area created by internet culture
Unlike existing cryptocurrencies, memecoins are digital assets that were created based on internet memes, humor, and community culture rather than technological innovation. Originally started as a joke or parody, but as public interest and investment sentiment combined, cases that actually created enormous market value emerged one after another.
While mainstream cryptocurrencies like Bitcoin and Ethereum pursue innovation in blockchain technology, memecoins use 'fun' and 'the power of community' as their weapons. Sometimes, a tweet from a celebrity can drive up the price of the coin several times.
Representative meme coin features:
๐ฏ Relying on 'fun' and 'community power' rather than technical differentiation
๐ฑ Price fluctuates rapidly depending on social media and celebrity mentions
๐ฐ Generally low entry price → high psychological accessibility
๐ฐ High-risk, high-return structure, stimulating 'lottery psychology'
Especially among young investors, meme coins have become a cultural phenomenon beyond a simple investment vehicle. In online communities, meme coin-specific slangs such as 'diamond hand (long-term holding)' and 'to the moon (surge)' are commonly used.
2. Representative success story - The reality of dreamlike returns
๐ Dogecoin (DOGE) - A miracle that started as a joke
A representative meme coin that was born as a joke in 2013. It was created based on the Shiba Inu meme, and after Elon Musk's public support, it recorded an explosive price increase in 2021. It has risen by over 8,000% in 2021, and some of its early investors have made hundreds of times more.
Especially after Musk mentioned that """"Dogecoin is the people's cryptocurrency,"""" the power of memecoins has been proven by the fact that a single tweet has caused the market cap to fluctuate by tens of billions of dollars.
๐ฅ Shiba Inu (SHIB) - The Success of the 'DOGE Killer'
An Ethereum-based memecoin that emerged in 2020 and called itself the 'DOGE Killer'. It showed a steep rise along with the memecoin craze in 2021, and at one point, its market cap exceeded $50 billion. In fact, there have been many stories in the media about investors who have made millions of dollars with SHIB.
One investor bought SHIB for $8,000 and made a valuation of $5.7 billion at its peak. Of course, not everyone cashed out, but it was an example of the extreme returns that memecoins can produce.
๐ธ Pepe (PEPE) - A New Myth of 2023
A memecoin based on a frog character that appeared in 2023. It reached a market cap of several billion dollars in just a few weeks after its release, creating a new memecoin success story. The explosive growth was achieved by combining the popularity of the 'Pepe the Frog' meme and the passion of the community.
In this way, some memecoins have gone beyond mere fun and created real asset value in the market. However, there is a dark side to the memecoin market that is hard to jump into just by looking at these success stories.
3. Cold Failure Cases - The Shadow Behind Glorious Success
There are more failures behind success. In fact, there are statistics that say that more than 90% of memecoin investors experience losses, so the success stories are very few.
⚠️ The Fall of Countless 'Copycat' Memecoins
Most of the hundreds of copycat memecoins that followed the success of Dogecoin and Shiba Inu only received initial attention and collapsed in price or were delisted from exchanges. Some people may know the names SafeMoon, ElonGate, and DogeCoin2.0, but they all fell more than 95% after their initial craze.
๐ธ 'Rug Pull' (๋จนํ) project rampant
There are also frequent cases of scams where the operator takes only the initial investment and disappears. This especially happens frequently in decentralized exchange (DEX)-based meme coins, and investors lose all their investment money overnight. In 2021-2022 alone, there have been rug pull incidents worth billions of dollars.
๐ญ Community manipulation and false marketing
There are also many cases of 'pump and dump', which stimulates investment sentiment through fake Twitter accounts, manipulation using Telegram bots, and impersonation of celebrities, and then rapidly increases and decreases the price. In particular, it is easy for individual investors to suffer damage because it is often carried out systematically through messengers such as Telegram or Discord.
According to one study, more than 80% of newly launched meme coins lose more than 90% of their price within one month of launch. It is important to recognize that behind these flashy success stories, there is this harsh reality.
4. 5 Criteria to Check Before Investing in Memecoin
Memecoin is as risky as it is attractive. If you are considering investing, be sure to check the criteria below. This is a practical guide based on the experiences of numerous Memecoin investors.
๐ Verify project transparency
- Verify the development team's real name and history
- Specificity and reliability of the white paper and roadmap
- Verify actual development activities through GitHub, etc.
- Transparency and frequency of community operation
- Completion of audit - Verification of code security
๐ฅ Community size and actual activity
- Actual participation and exchange of opinions, not just the number of followers Activity
- Users’ voluntary content creation (memes, videos, posts, etc.)
- Participation by real users, not bot accounts
- Activity on various platforms (Twitter, Reddit, Telegram, etc.)
- Loyalty and long-term holding intentions of community members
๐ฑ Exchange listing status and liquidity
- Listing on major exchanges such as Binance and Coinbase
- Check if the daily trading volume is sufficient (at least several million dollars)
- Check if the spread (difference between buy and sell prices) is not excessive
- If trading only on DEX, review the risk of rug pull
- Slippage (price slippage) during actual trading Check
⚖️ Token distribution and ownership structure
- Token holding ratio of the development team and early investors
- Lockup period and vesting schedule
- Total issuance and additional issuance plan
- Existence of a burn mechanism
- Monitoring the movements of large holders (Whales)
๐ง Beware of excessive expectations
- Do not be fooled by marketing phrases like 'the next Dogecoin' or 'the next Shiba Inu'
- Projects that promise or guarantee exaggerated returns Avoid
- Don't get caught up in the FOMO (Fear of Missing Out) mentality
- Think critically about exaggerated success stories on social media
- Decide on your own investment principles and cut-off line in advance
The most important thing is the principle of small-scale investment diversification. Since meme coins are accompanied by extreme volatility, it is advisable to invest only within 5-10% of your total portfolio. No matter how confident you are, don't risk all your assets.
5. Practical Investment Strategy - Smart Memecoin Investment Method
Now that you know the theoretical verification criteria, let's look at specific strategies that can be applied to actual investments.
๐ Step-by-step investment approach
Step 1: Observe and learn (1-2 weeks)
Join the community of the memecoin you are interested in to get a feel for the atmosphere and observe price fluctuation patterns. Sufficient research is more important than hasty investment.
Step 2: Small test investment (10-20% of the planned investment amount)
Experience actual trading with a small amount and understand the characteristics of the coin. You can also learn how to use the exchange during this process.
Step 3: Gradually increase the weight (only when you are confident)
If the initial investment is stable and you are confident in the project, gradually increase the weight within the pre-determined limit.
⏰ Timing and psychology management
Buy timing: The ideal is the early stage when the community is formed, before the explosion of public interest. However, it is very difficult to accurately predict this.
Sell timing: It is recommended to set a target return in advance and gradually sell when it is achieved. There are many cases where people lose all their profits due to being greedy.
Psychology management: It is common for Memecoin to fluctuate by more than 50% in a day. You need a strong mentality that won't be shaken by such extreme volatility.
6. Notable Memecoin Trends in 2024
The memecoin market is also continuously evolving. Projects that are trying to provide real utility beyond simple fun are emerging, so it's worth paying attention.
๐ฎ Memecoin combined with GameFi
Memecoins that are being used in actual games are emerging, going beyond mere memes. Users can enjoy the game and earn tokens at the same time, creating a more sustainable ecosystem than existing memecoins.
๐ฑ Community Governance Introduction
There is an increasing number of memecoins that have introduced governance functions that allow token holders to participate in important decisions of the project. This is developing in a direction that goes beyond simple speculation and induces actual participation and contribution.
๐จ NFT Connection
Projects that combine memecoins and NFTs (non-fungible tokens) are also attracting attention. There are increasing cases where community members issue meme images they created themselves as NFTs and create additional value through them.
These trends can be seen as MemeCoin's efforts to build an actual ecosystem beyond a simple means of speculation. However, since it is still an unverified experimental nature, a cautious approach is necessary.
Conclusion - Coolness is the answer at the boundary between fun and investment
๐ฏ MemeCoin is clearly creating a new trend in the cryptocurrency market. It is a unique phenomenon created by the meeting of internet culture and finance, and has actually brought great profits to some investors.
⚡ However, at the boundary between 'fun' and 'profit', jumping in without cool-headed judgment can lead to great losses. You should always remember that behind every brilliant success story, there are countless failures.
๐ก️ If you are considering investing, it is a safe meme coin investment strategy to always keep in mind the principles of project verification, community analysis, and diversified investment, and always keep the 'worst case scenario' in mind.
๐ฒ Ultimately, investing in meme coins is about taking a 'calculated risk'. If you approach it carefully after sufficient study and preparation with spare funds that can be used for living without any problems even if you lose everything, it can be a new investment opportunity.