Dogecoin has many attractive aspects, which is no doubt why it has inspired many imitations. Thanks to its notable price increase, with a market capitalization of $7 billion and a huge global following, it has inspired more than 150 meme-themed cryptocurrencies, including Shiba Inu, Baby DogeCoin, Doge Killer, Daddy Doge, DogeCola, etc., hoping to springboard off Dogecoin’s popularity to also make a fortune.
Dogecoin was created as a joke in 2013 by Adobe Product Marketing Manager Jackson Palmer and software engineer Billy Markus to make fun of how people buy cryptocurrencies that they don’t understand. However, the joke sort of backfired as due to the fun and interesting nature of Dogecoin it attracted fans from across the world, who call themselves "Shibes”. More recently, DogeCoin has gathered more attention, including Tesla CEO Elon Musk’s who in 2019, tweeted that, “Dogecoin might be my fav cryptocurrency. It’s pretty cool.” His follow-up tweets in 2020 only served to inflate the prices of Doge, including in January 2021 when Musk helped send Dogecoin prices up 800%, and into the top ten cryptocurrencies by market value. The most recent Elon Musk inspired token called Flokinomics went up 2,300% in 24 hours.
Is Dogecoin likely to continue to exist?
Despite the early scandals that prompted the founder of Dogecoin to leave the project, self-styled “Shibes” remains loyal to Dogecoin. Since the beginning of 2021, the price of Dogecoin has risen by more than 6,000%, which is jaw-dropping in the ascent of any cryptocurrency, let alone one started for comic effect.
Billionaire entrepreneur Mark Cuban, a staunch supporter of cryptocurrency, recently stated that he believes Dogecoin can be used as digital payment, mainly because people gradually accept and like it. Specifically, he told US-broadcaster CNBC recently that not only is Dogecoin “a medium that can be used for the acquisition of goods and services,” but that also "the community for doge is the strongest when it comes to using it as a medium of exchange".
Dogecoin is now available at mainstream cryptocurrency exchanges and can even be used as a payment method in some merchants. Cuban’s basketball team, the Dallas Mavericks, is rolling out the coin for payment with the help of BitPay, which is providing it as a payment option for its merchants and consumers.
In addition, the lack of strategic direction that has somehow not hindered Dogecoin’s rise has itself been adjusted recently. While the Dogecoin Foundation was established in 2014, it was dissolved after the two co-founders of Dogecoin left the project. Now in 2021 Dogecoin stated that the foundation would have a new board of directors and hold monthly meetings to help run the project. The Dogecoin Foundation is represented by Vitalik Buterin of Ethereum, as well as Dogecoin co-founder Billy Markus, and a representative of Elon Musk. Eventually, it seems Dogecoin, which has a market value of $40 billion, will have new leadership and better use-cases.
But the outcome of many other meme coins and tokens is still unpredictable. Is there any hope for Shiba Inu or Baby Dogecoin? Will we see a bunch of abandoned “pet” coins becoming bullish again value-wise in the future? However, it is undeniable that a number of factors are causing meme coins to experience a crisis.
Too many samey meme coins
Search for coins containing "shib,” "inu,” "dog" or "cat" on CoinMarketCap to find out how many meme coins are on the market, and you will discover that there are more than 150 such coins. Because none of them has a truly reliable business plan, it is unlikely that any of these meme coins will genuinely replicate the unpredictable success of Dogecoin. On this basis it is almost impossible for investors to determine which meme coins may succeed, which is a key reason why meme coins are no longer popular for investment purposes. Meme coins allow crooks to thrive. Since meme coins do not have any primary value, it is easy for crypto scammers to take advantage of the popularity of Dogecoin to create a brand-new cryptocurrency and carry out some publicity to raise the price and then sell it for a profit. The crazy increase in the price of Dogecoin has also caused investors to be so afraid of missing the next Dogecoin that they invest in new ventures without thoroughly studying the token and its founder. It is even difficult for any exchange to give a precise number of how many meme coins are scams.
Meme coins are not a good long-term investment
Meme coins may generate spectacular short-term gains as people are willing to speculate on the possibility of making money in a short amount of time, thereby pushing prices up.
But I hope that investors will look to invest money in cryptocurrencies that stand a reasonable chance of performing well over time. As a market for investable assets, cryptocurrency is an unpredictable asset class. So, before investing in cryptocurrency please study what real problems the project you want to invest in can solve in the future, who participated in the project, and other factors related to it. In this way, you can better assess the likelihood of their long-term commercial success.
The lack of a trusted leader
Another obstacle to sensible investing is that we often have no way of knowing who the leader of each meme coin project is. Take Shiba Inu, which is currently on a more significant scale than other meme coins apart from Dogecoin. In May 2021, Shiba Inu coin, nicknamed the “Doge Killer”, reached a market cap of $6.6 billion. Its leader is anonymous, which is uncommon for any crypto project apart from the most famous exception to that rule, Bitcoin. In simple terms, before you buy any cryptocurrency, it's prudent to find out who is behind it, their relevant experience, and whether they have been involved in cryptocurrency scams.
Most meme coins have no practical use
The magical allure of Dogecoin is that it captures people's hearts, which is very important for a successful meme coin. However, at least until very recently Dogecoin has had no practical use other than being a joke. In contrast, other mainstream cryptocurrencies such as Ethereum which runs DeFi smart contracts, put their energy into blockchain technology development and problem-solving. Despite this, they can learn about the value of community from Dogecoin because although it was created as a joke, it still attracts millions of Shibes.
BigONE Chairman Anndy Lian who was quoted recently said: “Although Dogecoin may still be popular, this does not mean it’s a good idea to speculate on any new cryptocurrency borrowing the name of Dogecoin or Shiba Doge. There are many great cryptocurrency projects born every day, but it is still unclear whether they will succeed or not.”
Dogecoin is very successful now. After its new foundation is established, it may have several use cases developed, such as using Dogecoin as digital payment. However, it’s worth repeating that Dogecoin’s situation is a special case and cannot easily be replicated. It will certainly not make those cryptocurrencies with no practical use a good investment choice. And although many Dogecoin clones have published whitepapers, you will find precious little cryptocurrencies with practical uses apart from the likes of DogeCola which have created their own branded fizzy drink for example.
And yes, despite all that I have said, meme doge coins are still going to the moon.