Meme coins have increased in popularity recently despite their perceived lack of use cases. The idea of meme coins comes solely from memes, an important part of online communities since the beginning of the 21st century. While their main purpose is to provide entertainment, people use memes for parodies, intertextuality, and even politics. In the same manner, meme coins are more than fun cryptocurrencies to invest in.
Dogecoin, released in 2013 and based on the Doge meme, is considered to be the first meme coin. The Dogecoin price was somewhat stagnant until Elon Musk endorsed it, triggering a massive surge in value. Since then, many other meme coins have appeared on the market, such as Pepe, which had a similar timeline in terms of popularity and price.
While both have minimal use cases, their applications are diverse and culturally important for meme communities. So, which is better as an investment?
About Dogecoin
Dogecoin is a peer-to-peer cryptocurrency that uses the Scrypt algorithm and Litecoin-based technology to support low prices and unlimited supply. Since it has the same consensus mechanism as Bitcoin, proof-of-work, Dogecoin requires mining to create new coins and make transactions safe.
Dogecoin’s use cases include online purchases, tipping, and trading. In 2019, the crypto exchange Binance listed it on the platform, making it easier for investors to acquire it and contributing to its increasing market capitalization.
What’s certain about Dogecoin is that its value is linked to media coverage and trends, which can make it risky sometimes but highly demanded. So, its all-time highs help investors leverage the market sentiment on the crypto market.
About Pepecoin
The Pepe coin was created based on the Pepe the Frog meme. The digital asset was built on the Ethereum blockchain, and it’s based on three principles:
- A deflationary mechanism that creates scarcity and demand through burning tokens;
- A redistribution system through which Pepe holders get rewards to foster engagement;
- A no-tax policy that allows traders to make transactions without additional fees;
Compared to Dogecoin, Pepe coin has a limited token supply of 420,690,000,000,000, which challenges its capability of reaching a considerable market capitalization. However, its past performance as a benchmark and the community-driven momentum can contribute to its increasing popularity among investors.
Pros and cons of Doge and Pepe
Investing in meme coins comes with several risks, significantly since their popularity can decline, becoming part of the numerous obsolete cryptocurrencies on the market. That’s why it’s necessary to look into their pros and cons and decide if they’re worth the shot.
For example, Dogecoin has the benefit of the “pop culture currency” that supports its increasing value. At the same time, its high trading volume makes it an easy option for entry and exit trades, offering the liquidity and stability it needs.
However, its growth potential isn’t that significant compared to other meme coins since it’s one of the well-established altcoins on the market. Plus, its dependency on market sentiment can lead to price fluctuations.
Pepe coin has the great advantage of offering high returns due to its newness, which increases demand. Plus, short-term traders benefit from its volatility for quick profits, making it more lucrative than Dogecoin. However, these features also make Pepe coin risky and prone to pump-and-dump activities, while the lack of long-term viability can hinder its power on the market.
Diversification is the answer
Instead of choosing between the two cryptocurrencies, you could add both to your portfolio to mitigate risks and increase its value. Have Doge for safety and growth potential and Pepe for riding the wave of meme coin volatility.
Portfolio diversification is one of the most important strategies when investing in cryptocurrencies because it minimizes risks and offers more stability in a volatile market. It’s best to allocate significant funds to more reliable assets, like Bitcoin or Ethereum, and continue with popular coins based on their use case, type, or technologies.
It’s also recommended that assets be reallocated and rebalanced periodically to adapt to market changes and trends. Continuous research is also wise because the crypto industry is still developing.
Will more meme coins be created?
Meme coins are mostly built for entertainment and to gather communities who love memes. Therefore, they might not seem the best solution for long-term investments. At the same time, many consider meme coins to slowly lose their sparkle in the investment sector, but this might be
far from the truth.
Cryptocurrencies and blockchains have integrated the entertainment industry in a special way through non-fungible tokens, blockchain-based games, and artificial intelligence. The underlying
technology allows for the automatization and adoption of fast and reliable transactions.
Therefore, since there are so many memes on the internet, it may be possible for more meme coins to enter circulation. However, the increasing use cases might make them better in the future.
Meme coins with diverse use cases
The popularity of meme coins requires them to become useful, so demand is powered by something else rather than media popularity. For example, these meme coins offer unique use cases:
- Crypto All-Stars supports NFT integration, gaming, and virtual world synergy;
- Flocherz ensures an inclusive ecosystem. Focuses on charity and engagement;
- Sponge V2 has refined tokenomics features and provides meme-based campaigns;
- Floki Inu has a unique ecosystem and is a utility-focused project;
Therefore, not all meme coins are without utility in the crypto environment. Investors can leverage their features to support portfolio diversification and ensure the safety and diversity of the market through uniqueness. The upcoming meme coin trends could also support crypto adoption since they’ll become an essential part of every investor’s portfolio.
Pepe vs Doge: Which one is a better investment?
Pepe and Doge are the most popular meme coins, as the memes they’re based on were and still are important in online communities. Although they don’t have special use cases, these meme coins have great transaction features, low fees, and fast times. Still, Doge is better as a long-term investment, while Pepe coin is a better option for day traders.
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