1 min read
17 Jan

What are meme coins?

Meme coins originated as a joke and gained traction among internet users. These projects do not solve any problem in the crypto world. For meme coins the key is not utility but the ability to attract a huge community. The big the community backing a meme coin the higher it will increase in market cap and price of the coin. 

The first meme coin was Dogecoin which originated in 2013. It rose to fame after Tesla CEO Elon Musk mentioned it and pumped hard in 2021. Shiba Inu is another coin that was created in 2020. It was termed as the Doge killer and it attracted a huge community. It pumped with over one million percent in one year. Other examples are Dogelon Mars, Akita Inu, Safemoon etc.

How to identify legit meme coins

It is good to invest in coins whose community's main aim is not to pump the price but have other plans like giving back to the community through projects and donations. Communities like Shiba Inu collect funds to rescue stray dogs. It is important to also check the projects long term goals which can be identified by going through the project whitepapers.

Check the track records of the developers in the projects. Developers who have a bad record are a red flag and there's a high possibility their project is a scam. Investors are likely to have confidence in projects who publicly list their developers than those that choose to remain anonymous. 

It is important to check how the coins are distributed. You should be wary of projects that have majority of the coins distributed to a few people as they are likely to manipulate the market disadvantaging other holders.

Best trading strategy for meme coins

Majority of meme coins pump hard and then dump. In order to profit from them you need to have a good entry and exit strategy. The trick here is to invest early in good meme coins. Do not be too hungry for profits. Have set targets after which you sell off some of your coins (take profit). Sell the rest down the road so that if there are other pumps along the way you profit from them.

Meme cons are a good way to get huge profits if you invest in the right ones. Let's be very cautious when investing in them and only invest what we can afford to lose.

Happy trading 😊

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