Will meme tokens be able to maintain active growth dynamics next year? What are the main risks of investing in such assets? Read in our LATOKEN review!
Over the last year, the popularity of “meme” tokens has grown significantly, and we could all be convinced of this. For example, the Dogecoin cryptocurrency, created in 2013, gained a “second wind” thanks to Elon Musk and his tweets. After that, many new kinds of similar tokens appeared on the market, such as Shiba Inu, Doge Floki, Dogelon Mars, Floki Inu, and others.
Such a high interest in “meme” tokens may be related to the profitability they bring. For example, SHIB has risen in price by 246,153,746% since the beginning of the year. The Floki Inu price has risen by 9185% since the altcoin’s creation in June, and the value of Dogelon Mars (ELON) has increased by 2233% since April. In November, Dogecoin (DOGE) and Shiba Inu (SHIB) were among the ten largest cryptocurrencies in terms of capitalization for some time. Now the coins are in 12th and 13th places.
What may the market for “meme” cryptocurrencies expect next year? Will the sector be able to maintain the growth momentum that has been observed over the past 12 months? Let’s try to figure it out.
Dependence on the general trend
The “meme” cryptocurrency sector is almost entirely dependent on media and social networks mentions. Therefore, the dynamics of the “meme” tokens largely depend on the market’s interest as a whole, which, in turn, is associated with the current trend.
In other words, interest in this speculative story might continue, but only if the crypto market does not go into long-term stagnation. The growth can be shown primarily by projects that are already popular at the moment since they have a wider audience and a higher citation index.
It cannot be said whether it makes sense to buy “meme” tokens during a correction. However, when the correctional trend is exited, capital often flows from the “meme” tokens into more fundamental coins, which leads to an even greater decrease in the price of meme tokens. The rapid rise in prices for “meme” cryptos begins after the end of the active growth phase of Bitcoin (BTC). Such a cyclical nature of the crypto market has been repeatedly noted earlier.
“Meme” tokens to become more expensive: how?
When choosing promising tokens, newbies and non-professional market participants often look at the price of a currency and the percentage of its growth. Organisations issuing such tokens saturate them with volumes and increase turnover.
It is a separate and lucrative business that generates mega-popularity and super-profits. Then the stages of “hysteria” begin, associated with growth, fall and retracement. Whether or not to participate in the trade of such coins should be your decision. In our LATOKEN reviews, we often write that when you are dealing with cryptocurrencies, it is essential to do your own research, constantly stay up to date, and not copy the actions of other traders.
However, it is worth noting that the majority of ordinary crypto users who take part in the “promotion” of such tokens, as a result, can become a “meat shield” in these constant ups and downs.
What are the risks
The main risks and danger of buying “meme” tokens are that such cryptos, in fact, have little value for the cryptocurrency market and technologies. We can say that the price of such tokens is provided only by the fact that they are bought to make money on the “hype.” Because of this, there is a risk of losing money at any time. However, to create a “meme” token, you do not need any extra costs. What is more, you do not need to build a business.
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LATOKEN crypto exchange does not provide any investment, tax, legal, or accounting advice. This article is written for informational purposes only. Like other assets, cryptocurrency is subject to market risk. Please do your own research and trade with caution.