Return Of The Meme Coins
Most of 2022 has been an extended bloodbath for cryptocurrencies. After resisting use of the dreaded term 'bear market' for months as Bitcoin teetered above and below various key indicators, at last YouTubers and other crypto influencers threw in the towel. Then came the destruction of the Terra Luna ecosystem with the loss of an entire multi-billion dollar stablecoin and the halting of withdrawals on a host of crypto lending platforms. It's fair to say that the crypto-sphere is in a prolonged hangover phase after the heady days of the DeFi summer, new all-time highs of BTC and ETH, and the NFT mania that swept the world until so very recently. So with blood running everywhere in the streets, why are Doge and even Shiba Inu pumping hard right now? Is this total madness driven by irrational exuberance, ape-like behavior that should put every serious investor on alert? Or do these crazy dog-inspired meme coins actually have some fundamentals? Let’s take a look, but first, let’s just be clear about this. None of this, not a single word is financial advice. Always do your own research. With that said, let’s dive in.
Every dog has its day
Dogecoin, in case you hadn’t heard, is the OG of meme coins. Where Bitcoin is the only crypto that gets away with having an anonymous ‘team’ of creators, Dogecoin is the only meme coin that gets away with random billionaires pumping the hell out of it and claiming that they will physically take it to the moon on a rocket ship. Why is this? Both are prime movers in the space. Bitcoin was created by the mysterious Satoshi Nakamoto, although the identity of the mystery tech has allegedly been confirmed in a court of law. The goal was to create a central bank independent, high-speed, borderless digital currency. Dogecoin meanwhile was created by random software developers Billy Markus and Jackson Palmer as a joke to mock the speculative frenzy that crypto was undergoing at the time.
Who let the dogs out?
OK. Enough with the canine references. But seriously, what is happening with the dog coins over the last week? The last seven days have seen Dogecoin jump by over 20% and Shibu Inu rise by more than 50%. These are crazy numbers compared to stock exchange or precious metals markets, but if we compare them to the rest of the crypto market right now, this shouldn't be happening at all. Especially not with a coin that was created as a joke and another that was created to emulate and compete with a joke coin.
Shiba Inu: Dogecoin Killer
Before we continue, a quick word about Shiba Inu. This coin was created during the heady days of the 2020 bull market to capitalize on the meme value popularity that Dogecoin was experiencing back then. A combination of Elon Musk tweeting cryptic support for dog-based coins together with a slew of teenage TikTokers and celebs jumping on the Dogecoin bandwagon created a scramble for blockchain developers to get new dog coins up and running fast. Shiba Inu was one of the earliest of these and used the ploy of delivering trillions of coins to Vitalik Buterin’s wallet address to gain publicity.
Where there’s a pump, there’s a dump
After reaching all-time highs that created Dogecoin millionaires publicly on social media platforms around the world, the crash that followed was painful to watch. As with all irrational markets, those left holding the bag lost life savings, self-respect, and in some cases fortunes that were gained in weeks were lost again in days. Goodbye meme coins. The world has learned its lesson. 2022 has marked the end of meme coin mania. Dogecoin and Shiba Inu have gone to zero and are now defunct. Except, that didn’t happen. Far from it. While hedge fund and pension fund managers have lost fortunes permanently due to the demise of UST and the chapter 11 bankruptcy of Celsius, teenagers who invested in Dogecoin and hodled through the dip may well see a return on their investment sooner rather than later.
Why the pump?
Despite a lack of interest on the part of the Dogecoin creators, others have gone to the trouble of adding value to the blockchain. New layer 2 solutions for both Dogecoin and Shiba Inu promise to make fees lower and transaction speeds higher for the meme coins and the ensuing chatter has sent prices soaring. Dogechain is a brand new platform that will allow holders of Dogecoin to bridge their coins for NFTs, DeFi investments, and more.
Shibarium meanwhile is a layer 2 solution for Shiba Inu which will allow for faster and more scalable transactions than the coin currently allows. The Shiba Inu team has also been busy creating their DeFi product and appears to be intent on making the world take their coin seriously. True to form, even though Shibarium doesn't even have a release date as yet, the price of Shiba Inu has been surging on the news alone. No doubt some investors will be taking profits already, just as soon as others are finally taking the plunge to buy in at local market tops.
