The memecoin phenomena is in full swing. Copycat projects are springing up faster than ever before. So with this wide selection how do we differentiate between the quality and the total crap? Unfortunately the bad news is most of the memecoins circulating the many ‘investment’ forums are total crap.
We have shortlisted and reviewed a few of the many memecoins which are currently being promoted on various forums. This list is definitely not a recommendation to buy. And it is far from exhaustive as projects emerge daily. We would urge you to conduct your own due diligence before making a purchase.
Buying memecoins is not an investment, it is pure speculation. If you are looking for the next Dogecoin your chance of success is very low considering the abundance of memecoins to choose from. We would suggest you only invest money that you can afford to lose and keep it to a maximum of a few hundred dollars depending on your net worth obviously.
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Also before buying it is important you conduct some basic level of due diligence. Here are a few areas to check:
- What are the tokenomics — most memecoins have 1 quadrillion coins, that isn’t a bad thing but check to see how many are held by the founders. You are looking for coins where the vast majority of the coins will be distributed to the community not to founders and advisors. These are supposed to be community coins!
- Work out the market cap. If you have a startup coin with a market cap above $10 million unless it has a good sized community it is one to avoid.
- We all have to start somewhere. A startup meme coin with only a few followers should have a market value to reflect this. The two should grow in parallel. A memecoin with a community of 10,000 followers isn’t worth any more than $10m, based on current valuations. Avoid memecoins which launch with only a website, a dream and a valuation that would make a wise man’s eyes water.
- Check out what they are saying in forums about the memecoin in question.
- Check out their Telegram community and see if they have happy users/investors.
- If a memecoin’s team is anonymous and justify this by explaining it is a community project then check very closely how many tokens are being set aside for the team, advisors, marketing and development. This is usually a ruse to keep as many coins for the founders as possible. In these cases the only people who will get rich are the founder, not the community. Avoid these projects.
Here is our shortlist and assessment of some of the newly listed memecoins:
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Obviously the starting place for any project is whether it makes sense. A project that is focused on nothing much in particular has a smaller chance of success than a project that wants to create a neat solution to a clearly defined problem. The key to a successful investment in the memecoin space is getting the balance right between the market cap and the size of the community.
The vast majority of memecoins are solely focused on making the founders rich, not the loyal community. Just take a look at the tokenomics. That usually translates to a market cap of over $50 million and a community of a few thousand. The gems are the ones with a market cap of under $10 million and over 15,000 followers. They are out there, we just need to find them.
If you are on the hunt for memecoins with potential then searching through the many new projects hitting the market every day is your best bet. Although you have probably crossed swords with the guy or gal who just made $2 million dollars on a small investment in SafeMoon the odds are against you. There is still no reason why we can’t participate in this phenomenon as long as we know the risks and don’t bet the house or the wife.
We can increase our chances of success by carrying out some basic due diligence so that we quickly rule out the projects which are a complete hustle. Remember this party isn’t going to last. That means someone is going to be left holding a bunch of worthless tokens. There will be a few that will stay the course and end up having value simply by their huge network effect, others however will disappear. If you enter this crapshoot and place your bets on a few carefully selected memecoins you have a better chance than the sceptic sitting on the sidelines who secretly wants to get involved too.
Always do your own due diligence and remember investing in cryptocurrencies and in particular memcoins is high risk and you could lose 100% of your investment.
Not Financial Advice
This article does not constitute financial advice or a recommendation to buy in any way. Always do your own research and never invest more than you can afford to lose. Investing in cryptocurrencies is high risk, and you could lose 100% of your investment. The article should be treated as supplementary information to add to your existing knowledge.
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