Do Memecoins like Dogecoin, Bonk, and Shiba Inu have a Future in This Market?

Even though the cryptocurrency market has been experiencing a rally over the past week or so, the bear market is likely far from over. Additionally, macroeconomic conditions like interest rate hikes mean that the irrational market conditions we saw over the past few years are not likely to continue. With these factors considered, are memecoins still a potentially strong investment? Let’s find out.

Memecoins are cryptocurrencies based on internet memes, jokes, or online communities. The most popular and oldest memecoin by far is Dogecoin, created in 2013 by Jackson Palmer and Billy Markus. Their intention behind the coin was to satire the volatility and speculative nature of the cryptocurrency market.

The coin immediately garnered a cult following, and online communities formed around it. However, it was not until the 2021 bull market that the coin reached ridiculous highs. Between May 2020 and 2021, the coin went from a price of 0.0025 cents to 0.73 cents, a 292x increase that gave the coin an $85 billion valuation. For reference, this was near the same market capitalization as automaker Ford, all for a simple coin created as a joke with an infinitely increasing supply. There were a few primary catalysts for DOGE’s explosion: Tesla founder Elon Musk’s praise of the coin on Twitter, the general extremely bullish market sentiment, and the strong community of DOGE holders shilling the coin on social media. Fans of DOGE argued that the community behind it and the “diamond hands” mentality of never selling would ensure that the coin would remain relevant forever.

Naturally, many projects attempted to copy Dogecoin’s popularity with varying degrees of success. The only coin that came close to dethroning DOGE was Shiba Inu, another dog-themed Ethereum token that was once valued at $40 billion. That being said, there were dozens, if not hundreds, of memecoins that achieved market capitalizations of over $1 million, an impressive feat given the baselessness of their value. However, for every success there were thousands of failures and scams, causing uneducated investors’ money to be lost forever.

Unfortunately, all good things must end: DOGE is down 89% from its high and is currently trading at 0.08 cents with a valuation of $11 billion. SHIB is down similarly with a $7 billion valuation. They are the only two memecoins left in the top 100, as this category of coin was the quickest to drop as soon as the bear market hit. This is because investors tend to liquidate out of their riskiest positions first, and memecoins may be the riskiest investment in the cryptocurrency market. It is more accurate to call it gambling since the rate of return is almost entirely random, and there is a high risk with a high potential for reward.

With all that being said, is there a future for memecoins? In a bear market, the answer is almost certainly no. Real projects with large teams developing innovative technology are having trouble maintaining the valuations, so there is little to no chance that a project made by a few people with no value other than an intangible community will be able to skyrocket in this market. Additionally, the mainstream interest in cryptocurrency is nowhere near where it was in 2021, meaning that fewer new investors will put money into these types of projects. The next bull market may see a second wave of memecoins, though likely not to the extent of 2021. However, it can be argued that DOGE, and to a much lesser extent SHIB, have broken through the classification of merely a memecoin and have become a staple asset in the crypto market. Dogecoin has a 10-year history and is still thriving, and at this point it is somewhat of an indicator of the memecoin market, much like Bitcoin is to the rest of the cryptocurrency market. SHIB, while still incredibly new and too early to make any concrete claims, has held up surprisingly well and is still a top 15 asset by market cap. If DOGE is the Bitcoin of memecoins, then SHIB might be the Litecoin equivalent.

The most recent memecoin that gained traction, Bonk, is a Solana-based token. It is already down 75% from its high and went from hundreds of millions of dollars in volume to around $10–15 million in two weeks.

In any crypto market, whether bearish or bullish, putting money into memecoins is no different than gambling. The safest bet is Dogecoin, which has proven its resilience over the past ten years. While still in its infancy, Shiba Inu has stuck around in adverse market conditions and is a riskier memecoin bet. Overall, the memecoin industry has been slowly dying since the market slowdown and shows no signs of returning anytime soon.

By Lincoln Murr



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