Rise of Memecoin: A New Opportunity or Another Ponzi Scheme?

What is Meme Coin and Why is it growing?

When we think about crypto assets like Bitcoin or Ethereum, they were created to improve our financial industry by introducing valuable innovations such as DeFi, Smart Contracts or Dapps and many more. This concept is also the reason these coins are so valuable for people to use them within the network and investors. A meme coin or token on the other hand is quite literally the opposite of this where they are created for fun and sometimes without any proper fundamentals whatsoever.

Source: https://theface.com/life/what-is-a-meme-coin-dogecoin-floki-shiba-inu
  1. Unclear Regulations: The Crypto is still in its infancy stage and the rise of meme coins is a clear indication why it lacks a proper structure. There is no real way to define what is legal or not, which is why these meme coins keep crossing the border on what a right crypto asset should be. While the current regulations only oversee the exchangers, there should be further regulations on what fundamentals a crypto should have that limits these memes coins from being listed on Exchanges or Ranking sites for everybody to see and eventually lose their money.
  2. Less Barrier to Entry: It is literally quite easy to create a coin or a token with or without any proper utility or fundamentals and to be listed on market cap rankings. As to create a token you only need to get to a token generator which you will then do an ICO or Airdrop to grow your community and before you know it you can get listed on exchanges and Market Cap rankings. It literally costs nothing to generate and get your token listed so that explains why these meme coins with various different names keep on growing and why there are so many fraud cases happening in the crypto market. The exchanges or listing sites should do a better job in verifying the fundamentals of the coins or tokens that are listed on their platform.
  3. Lack of Education on the Crypto Space: Crypto may be just 13 years old but the number of Crypto Investors that have dipped their toes on this space has been increasing year on year. Even though a lot of Crypto Investors might consider themselves experts and still view the space as a ‘get rich quick’ scheme and invest on coins that have no fundamentals. This is why more education should be there to not only understand the Crypto Space and evaluate the fundamentals of an asset to invest on. With more education, it will enable investors to be smarter, and so reducing the amount of investments in these meme coins and eventually limit the number of these meme coins from appearing.

Is it another Ponzi Scheme or can you really profit from it?

The question whether you can profit or not from these meme coins, has to also go back to the question of what kind of investor you are? If you are a trader with a proper enter and exit strategy, you might be able to increase your portfolio by 100% or 1000% and that is a remarkable return that you won’t get in any other financial market. But if you are an investor that lives paycheck to paycheck, these memecoins would really not be a viable option.

How to pick the valuable coins from a haystack of shitcoins?

With all the growing meme coins, it doesn’t mean there are no valuable crypto assets that you can find out there. Now it might need a little research to get these coins which come with a breakthrough innovation and great utility but it would be worth for you all HODLers out there. Here are some things you need to consider when looking out for these valuable crypto assets:

Source: https://phemex.com/academy/bitcoin-fundamental-analysis
  1. Do those Crypto Assets have any Utilities?

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Nagaya Technologies

Nagaya Technologies

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NAGAYA (NGY) is a Gold-Backed Cryptocurrency with Subsidiary Projects. We aim to build Trust and Value through LEGALITY and TRANSPARENCY. https://nagaya.co/