Meme Coins: Elon Musk’s Trained Puppies
In recent years, meme coins have acquired the status of digital assets, captivating investors in pursuit of rapid profits. While these coins may appear alluring as an investment opportunity, they actually present a risky proposition for financial ventures.
What are meme coins
Meme coins have ascended as a digital phenomenon, courtesy of the ardent communities rallying around them, boasting a degree of fidelity rivaling that of Jesus' disciples.
Candidly, one might concede that Bitcoin maximalists bear a striking resemblance to the adherents of Shiba. The former, however, anchor their beliefs in a time and market-tested asset, whereas the latter vest their faith solely in the views of prominent individuals and opinion leaders.
Unlike conventional digital assets, meme coins lack fundamental indicators for valuation, complicating the task of discerning their intrinsic worth. Their prices are tethered directly to the efficacy of their promotional campaigns and the activity level of their social media communities. Furthermore, the market for these whimsical tokens is remarkably volatile and susceptible to precipitous price fluctuations. A case in point is the Pepe token, which since the outset of May 2023, has been showcasing roller-coaster-like oscillations on its performance charts.
This volatility is further amplified by a high concentration of coins held by a select few, rendering meme coins vulnerable to external influences. The absence of regulation in the market of canine and amphibian tokens poses additional challenges in shielding investors from fraudulent schemes or manipulation of public sentiment.
Elon Musk: Profiting or merely amused?
One of the most influential factors on meme coin prices remains the sway of high-profile figures like Elon Musk.
Explore these coins that have experienced his impact:
- Dogecoin (DOGE). Was established in 2013, borne from a popular Shiba Inu internet meme. It bears no practical value and lacks a clear developmental trajectory. Left in the lurch by its creators, it found solace in Musk's embrace. As of the dawn of May, it carries a capitalization of $10 billion.
- Shiba Inu (SHIB) Was conceived by an anonymous developer going by the moniker Ryoshi. Inspired by the success of his predecessor, in 2020 he spawned yet another canine-themed coin of dubious worth, absent of a transparent roadmap or any publicly disclosed information about investors. At the time of writing, the token boasts a capitalization of $5.2 billion.
- ElonGate (EG). Launched in March 2021 as a tribute to Elon Musk – the prominent defender of cryptocurrencies. Рhe developers remain anonymous, claiming their objective in creating the token was to “make the world a better place.” Their admirable crusade against all evils hasn't seen much success, yet thanks to a few supportive tweets from Musk, they've managed to increase the project's capitalization to a half a billion dollars.
- SafeMoon. A meme coin launched in Spring 2021 by a certain John Karony, whose project aim is to fund philanthropic initiatives and develop crypto-educational applications. A single tweet from Elon Musk in April 2021 containing the word “SafeMoon” accompanied by a rocket emoji saw the token's price skyrocket tenfold. Though the billionaire subsequently lost interest and the price gradually fell, the project's capitalization still sits at $3.6 million.
- Baby Doge Coin (BABYDOGE). A cryptocurrency created by the Doge Meme online community's fans in July 2021. Its foremost aim? To fund canine shelters. As expected, Musk did not ignore this token. On July 1, 2021, he tweeted: “Baby Doge, doo, doo, doo,” thereby sparking the crypto community's interest in this newborn coin. Consequently, the launch was a roaring success, and throngs of people rushed to “aid homeless dogs”. The project's current capitalization eclipses $250 million. The allocation of the profit for dog food and veterinary fees, however, remains a mystery.
If we entertain the outrageous thought that the eccentric billionaire is reaping profits from pumping meme coins, the bewildering price formation of these tokens suddenly becomes less enigmatic. Yet, we couldn't possibly suspect the owner of multiple companies of such unsavory conduct, could we? Even if those companies' stocks plummet as spectacularly as rockets blasted into space.
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