After it was announced that Elon Musk bought Twitter, its effect was reflected in the cryptocurrency market, as the news impacted not only Dogecoin (DOGE), but also other dog meme cryptocurrencies. The most recognizable of the meme cryptocurrencies, DOGE , rose as much as 30% last Monday just as the tycoon's purchase was announced with meme coins.
But not only DOGE went up, it also happened with Shiba Inu (main competitor among meme coins). However, SHIB's margin of increase is much lower than that of DOGE (barely 5% at its highest point of the day).The other doggy meme-related coins that benefited, according to CoinMarketCap, were Crypto Inu (up over 160%), Volt Inu V2, up over 64%; 3X Long Dogecoin Token (47%) or AmazinDoge, with 44% up. Ryoshi Token, also with a puppy as a brand, increased its price by up to 50% in 24 hours.
But what are these types of coins?
Meme Coins are cryptocurrencies inspired by internet memes and jokes. Dogecoin, for example, was inspired by the Doge meme created from a viral photo of a Shiba Inu. Although these cryptocurrencies are not normally meant to be taken seriously , they can gain momentum when members of the community buy the newest one to get in on the prank.Once it becomes popular and increases in value, retail investors sometimes jump on board and further increase the coin. Among celebrities, Elon Musk is probably the most famous person at it, and there's even a fork of Dogecoin called Floki Inu based on Musk's actual pet dog.Dogecoin and Shiba Inu are the best known meme coins.
Also Read: What is Hokk Finance
Dogecoin
Dogecoin, for example, had a huge increase in value in May 2021 before leveling off, and is currently ranked 11th in market capitalization, according to CoinMarketCap.His popularity grewMeme coins have been around for a few years, but some trace the origins of the current boom to the meme stock war of late 2020, when the Reddit community WallStreetBets vastly inflated the value of GameStop stock.After that, another group of Reddit users joked about increasing the value of Dogecoin in a similar way, and the trend caught on.Another Reddit community called SatoshiStreetBets launched a similar trading war against major cryptocurrencies like Bitcoin and Ethereum in 2021.
Internet celebrities
Internet celebrities like Musk also jumped on the meme coin bandwagon, and the resulting popularity led more people to create similar cryptocurrencies.Risks of investing in meme coinsSince they rely heavily on community sentiment and arbitrary outside influences such as celebrity tweets , the price of meme coins is incredibly volatile.
While this means that the value of a certain meme coin could rise dramatically, as happened with Dogecoin, it could also crash very quickly if the community loses interest and moves on.Squid Game ScamSome people have also created viral cryptocurrencies to scam people out of money with Hokk Finance meme Token.
Capitalizing on the viral popularity of the Netflix drama Squid Game, a Squid Game-based coin rose millions of percentage points in value to a high of over $2,000 USD per coin before the creators sold their units and disappeared with everyone's money.
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