So much has been written about meme coins, what is the key reason for investing into the hype?

The past year has seen the rise of various types of assets in the crypto world; NFT, Metaverse, play to earn tokens and Meme coins. Each one of them has plenty to write about, however, we will focus on Meme coins — crypto tokens that bring laughters to any conversation and yet has minted new millionaires in a short span of time. Dogecoin (DOGE) will come to mind, created in 2013 as a joke but saw its price skyrocketed more than 14,000%, before retreating more than 70%. This is still a whopping 3,900% rise from its pre-Meme coin price level, as illustrated in the chart below.

Meme coins typically has no utility, no use case and largely no future roadmap. What they possess though is the ability to capture the hopes and imagination of the masses and rally them to action. Wait, you could say, this sounds very familiar, the grandaddy of the crypto world, Bitcoin, is not very much different (other than the limit in its potential supply). Therefore, investing in Meme coins seems a lot more similar to investing in Bitcoin?

After DOGE’s spectacular rise, other Meme coins like Shiba Inu, Floki Inu all had their day in the sun, giving the lucky few 10X, 100X or 1000X return in their investment. However, there are hundreds if not thousands of such Meme coins and most haven’t seen any such gains in their value or have fallen into a state of oblivion. How then do we spot the next DOGE? Is it even possible to spot the next meme going to the Moon? The old adage of high risk, high returns applies.

Investing in Meme coins is harbouring the hopes and dreams of getting rich. The possibility of 100X, 1000X or more is what drives enthusiasts to try spot the next meme. There aren’t many investment opportunities like that with low barriers of entry. For the vast majority of people, the 99%, this represents the chance to pay off the student loan, the mortgage or buy the dream car. This is the investment thesis for Meme coins.

There is nothing wrong to harbour hopes and dreams of a better tomorrow, it is only natural to do so. However, we should not obsess over it. Investment amount should only be limited to a small portion of the money we can afford to lose, not all the money we can afford to lose. As spotting the next meme is a Herculean task, the smart way is to build a portfolio of Meme coins and hope that it rains on at least one. With 100X or 1000X returns, the overall portfolio will still see significant gains.

As meme investing is essentially similar to herd investing, a good indicator of a potential meme is the community supporting it and the online vibes around it. So do your research on Discord, Twitter, Telegram and Reddit discussions around Meme coins. Just bear in mind that you are looking for emerging memes, budding thesis and not full blown Mooners.

Like other corners of the crypto world, be wary of rugs and scams and most of all, be prepared to lose your money. That’s the price to pay for those dreams.