Meme coins present another challenge for the bitcoin sector, which is still mired in uncertainty. Meme coin's structure and usefulness, which social media companies are hyping, are already in doubt.
These coins are often held by a small group of people who own large concentrations. Seven crypto wallets control 48% of Dogecoin (DOGE). For Shiba Inu (or SHIB), 69% of ownership is concentrated among 15 wallets. With such a high concentration, a prominent investor could manipulate the market with their position or send the price of the coin crashing down when they cash out their holdings. Raj A Kapoor, founder, India Blockchain Alliance, told FE Digital Currency
Shiba Inu and Dogecoin are both alternative coinage whose continued survival is heavily reliant on a grassroots strategy. Meme coins are thought to be completely worthless on an intrinsic level. In terms of market capitalization, they are valuable, yet their only purpose is for amusement.
There is undoubtedly a lot of enthusiasm among the populace. The majority of investors are unaware of blockchain technology and cryptocurrencies. Dogecoin and Shiba Inu are examples of meme currencies, according to Catax CEO Gaurav Mehta.
According to a study by Nasdaq, the US stock market, those who have been heavily affected by financial concerns are more likely to buy meme coins.
For cryptocurrency-based investors, the risk-reward profile of Ethereum, Bitcoin, and larger altcoins such as Cardano is considered more viable compared to meme coins. Interestingly, Dogecoin has a market capitalization of more than $85 billion, and trailing behind it is Shiba Inu with close to $38 billion. However, it would be naive to write off meme coins in the current bear market. “Meme coins, are like penny stocks that will continue to entice newbies and speculators in crypto markets. However, those with a long-term investor mindset tend to evaluate crypto tokens dispassionately and take protocol fundamentals into account while making investment decisions,” Sharat Chandra, vice president – of Research and Strategy, EarthId, said.
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