Meme coins may seem like a joke, but they hold lots of potentials to make investors rich. For context, one just needs to look at Dogecoin. In the recent rally when Bitcoin tested $64k, Dogecoin gained by 12,000%.
To make it even easier to understand, Dogecoin was trading at $0.0019 on April 9th, 2020. If someone bought $1000 worth of Dogecoin at the time, they would have received $52,631. If they sold the same at its highs of $0.77 in April 2021, they would have made $40,525.
Neither Bitcoin, nor Ethereum, or any of the other major cryptos have matched this return. The same rate of return has been matched by other meme coins such as Shiba Inu, and Safemoon.
So what the future for these coins? On the one hand, one can argue that these coins pumped due to very short reasons. For instance, the Dogecoin rally started when Elon Musk started talking about it.
This created a ripple effect of meme coins. Some like Shiba Inu were simply copying Dogecoin, but they rallied too. On this basis, one may argue that they do not have much of a future since the fundamentals are not that strong.
However, while this may be true, there are a couple of factors, both internal and in the broader market, which could see them outperform the market long term. Some of them are:
All the meme coins that pumped in the recent crypto rally are now more visible to investors than ever before. This means they now have much bigger communities than they ever had in the past. For context, Shiba Inu is a relatively new meme coin, but now has a community of more than 500k followers. The same goes for Dogecoin and all the other meme coins.
The visibility they have received is quite significant for several reasons. Firstly, it means that they are more liquid than ever before. As such, in the next Bull Run, they could see an even bigger uptake by investors.
Then there is the aspect of adoption. Since they are now more visible, then businesses may find it easier to adopt them for everyday transactions. For context, since the rally started, Dogecoin has been adopted a couple of times for payments, including for buying property. Such growing use cases serve to give them intrinsic value. This could see them rally even more exponentially once the whole market rebounds.
Bitcoin is out of Reach to Many
There are growing calls for Bitcoin to start being traded in Satoshis. Big investors like Mark Cuban have noted that most crypto investors love cryptos that they can buy whole coins. Bitcoin and Ethereum no longer have that opportunity for many, as globally, not many people can afford to spend $40k or more to buy one whole Bitcoin.
On this front, meme coins present the perfect opportunity. For instance, with just $100, one can buy millions of Shiba Inu. Essentially, they get to leverage on both economies of scale and the potential for these cryptos to rally just like they did in the last Bull Run.
This makes sense because $1000 put in BTC today cannot make you rich, but the same amount put in a meme coin can easily make you rich if it rallies by thousands of percentages.
The above factors make meme coins worthwhile cryptos to watch going into the future. They are a pathway to wealth for many.
Disclaimer: This article is not trading advice. TheDechained holds no liability for investments made on the basis of this information. We recommend independent research before making a decision to invest.