Over the years, memes have become synonymous with internet culture. Go on pretty much any social media app and you’ll likely see one in seconds. People love them, and this is shown by how many memes are created and shared online.
Memes are so popular that they have bled across into the realm of cryptocurrency. Take the famous Dogecoin (DOGE) for instance – a token based on a ubiquitous meme from 2013. It was created by software engineers Billy Markus and Jackson Palmeras a joke version of bitcoin (BTC) that gave the public a friendly way to get into the crypto world. Considering the historic uncertainty and suspicion surrounding cryptocurrency in general, it proved to be a good way to show ordinary that crypto doesn’t have to be all that serious.
That being said, the figures are certainly no joke. Since the start of 2021, DOGE has seen a rise in value by over 14,000%. This surge was likely caused by endorsement by big-name celebrities such as Snoop Dogg, Gene Simmons and most notably, Elon Musk – who named himself “The Dogemaster” on Twitter.
How is DOGE valuable?
DOGE is just like any other cryptocurrency, which means it is subject to the same volatile market movements and price changes. While it shows the public a more fun and light-hearted side to crypto, it still comes with risk.
DOGE’s value dropped in early May, following Musk’s comments about the cryptocurrency being a “hustle” on Saturday Night Live. This came right after he described it as “the future of currency” and an “unstoppable financial vehicle that’s going to take over the world”.
However, crypto experts said that Musk’s comments had not harmed DOGE’s long-term outlook, and that the drop in value was driven by speculation. In other words, there was no lasting damage and DOGE had a good chance of bouncing back. Fortunately, DOGE has recovered and has since seen its value increase. Obviously, this is always subject to change simply because of crypto’s general volatility. Regardless, Musk’s words didn’t have a lasting effect on DOGE’s value, even more so when he announced his backing of DOGE over other cryptocurrencies like BTC and Ethereum (ETH).
Musk commented that the reason for this backing was simply because DOGE “has dogs and memes, whereas others do not”. This comment could be taken as a joke, but experts have speculated that DOGE’s value does primarily come down to its popular meme status.
Jehan Chu, managing partner at Kenetic Capital, commented: “It’s a true social currency – that's its value.”
DOGE’s influence – the rise of other meme coins
When something becomes popular, it’s only natural for others to follow in its footsteps. Following DOGE, several other meme currencies have also been launched, including Shiba Inu, SafeMoon, Hoge Finance, Mona Coin and Tiger King.
Shiba Inu (SHIB)
SHIB is an ERC20 token that was created in 2020. Like BTC, its creator is also unknown and goes by the pseudonymous name of “Ryoshi”. It was modelled after DOGE and has a market capitalization of over $7 billion (£4.9 billion), as well as nearly 400 trillion coins in circulation. It has also been named as the “Dogecoin killer”, although experts don’t believe it’ll go far in terms of price. For instance, Digital Coin Price predicted that SHIB will only rise to $0.00004607 by the end of 2025. Moreover, despite SHIB’s recent intense growth, many analysts don’t believe it’ll reach the $1 mark anytime soon.
SafeMoon (SAFEMOON)
A DeFi token that runs on the Binance Smart Chain. It was launched in 2021 and aims to fix issues relating to price volatility in cryptocurrencies. It has a market cap of $2.2 billion and has experienced a steady increase in price since its launch. SAFEMOON uses a protocol that discourages users from trading their coins and rewards long-term holders. People who sell the tokens are given a 10% penalty tax fee on the transactions, 5% of which is distributed to token holders.
Hoge Finance (HOGE)
HOGE is the DeFi brother of DOGE that runs on the Ethereum platform. It launched in 2021, and like DOGE, started out as a joke. However, it quickly gained traction on Uniswap due to its meme status and use of a smart contract that guarantees several months of locked liquidity for holders. For every buy and sell, there is a token burn and holders get a share of the transaction as a reward.
Mona Coin (MONA)
MONA was launched in 2013 and is based on the meme of a cat-like figure. It was launched by an anonymous developer who goes by Mr.Watanabe. It is predominantly used in Japan and has a market value of approximately $134 million. In Japan, it is accepted as payment in several stores (both online and in real life) and has been approved by the country’s Financial Services Agency. It’s also known for creating blocks in just 1.5 minutes, which is much faster than BTC’s 10-minute creation time.
Tiger King ($CAT)
$CAT was launched by reality tv star Carole Baskin. The purpose of $CAT is to allow users to buy merchandise or online experiences from Baskin’s Big Cat Rescue sanctuary in Tampa Bay, Florida. Baskin herself stated that she was investigating crypto in general due to concerns over the volume of US dollars being printed and distributed. She also commented that $CAT is not a currency for investment.
Are there use cases for these tokens?
The answer is a mixed bag, because some of them are already used. Most notably, MONA has been approved for use by the Japanese Financial Services Agency. Additionally, $CAT will strictly be used to pay for Baskin’s big cat sanctuary merchandise. However, as it only launched in early May, it’s difficult to know for certain whether it’ll be fully adopted by users.
Despite its popularity and fame, there are very few use cases for DOGE. While it has been accepted as a legitimate form of exchange by certain merchants, it’s still a long way off full-on adoption as a currency substitute.
Glauber Contessoto – “The Dogecoin Millionaire”
YouTuber Glauber Contessoto – known as “The Dogecoin Millionaire” made millions through investing over $250,000 in DOGE back in February.
Contessoto discovered DOGE through subreddit “r/wallstreetbets” and Elon Musk. He started out by investing $40, with DOGE costing just 1 cent at the time. Seeing his money jump to over $300 in the new few days, Contessoto decided to go “all in” with the cryptocurrency. While not a financial expert, he studied and published DOGE’s movements to promote it to his followers. Eventually, he invested $250,000 into DOGE and within about two months, Contessoto became a millionaire.
Since then, he has continued to hold his DOGE rather than sell. He told CNBC news that the coin’s volatility doesn’t bother him, and he has since bought more of it. He also commented that the “only way you’re going to guarantee your profit is holding long term, like Warren Buffett has said about stocks. And I believe that wholeheartedly”.
Will memes make you rich?
While Contessoto’s crypto tale is extraordinary, it’s important to remember that he is not a financial expert. When it comes to investing in crypto in general, experts say you should only invest what you can afford to lose.
Additionally, as meme coins don’t hold much value at the moment, they aren’t likely to make you rich anytime soon.
According to Trading Education, DOGE’s supply isn’t limited and that as the demand increases, so does the supply. As a result, this brings down the price and so DOGE will face difficulty in reaching a high value in future.
It isn’t a get-rich-quick scheme, and again, you should only invest what you can afford. So, don’t go taking out a second mortgage to buy DOGE, because while we love the iconic pupper, she won’t make you a millionaire overnight!