What’s behind meme coins PEPE, WOJAK and Co.

Memecoins: All just a Ponzi?

The crypto sector seems to have a token answer to every internet or real-life phenomenon. With crypto, it has become possible to tokenize the recent hype and give it a unit of account. Memecoins make the sector, which has meanwhile become complex, accessible again and fun. At least for a few investors. Because even if nobody likes spoilsports – the coins meant as a joke are unfortunately also full of pitfalls that many beginners do not understand. Nothing has changed since the wild phases of the 2021 bull market.

The publishers are often unknown and hold a large part of the coins themselves. If they, or those who got in particularly early, sell, the price plummets. So-called “pump-and-dumps” are pre-programmed. It also becomes dangerous if users connect their wallet to highly dubious sites to receive supposed “Memecoin airdrops”. Unsurprisingly, there have already been cases in which wallets have been robbed using this scam. This is one of the reasons why many of the tokens will soon disappear from the scene. They then carry with them the hopes (and the cryptos) of many occasional investors who dreamed of making quick money with the funny tokens.

Is the investment worth it?

Memecoins are like a wild, digital chair dance. If you get in too late, you usually lose. The tokens attract attention with insane promises of profit, which in reality are mainly achieved by insiders. This is also the case with PEPE, where a “lucky” meme trader with a $25 investment is said to be millions of dollars in profits scored However, he will never be able to realize this without letting the highly illiquid market of the token and thus the price collapse. A memecoin can also become a one-way street for supposed “winners”.

The memecoin mania is also becoming increasingly fast-paced. PEPE and Co. are only a few weeks old. So if you start now, you might think that you are there comparatively “early”. But PEPE’s 500x surge in price spans just a few days. This and other hypes may have already seen most of their gains by the time the crypto general public finds out.

And yet: since Dogecoin and Shiba-Inu it has been clear that reason has no power here anyway. The joke coins in their entirety are now just as much a part of crypto as bitcoin and ethereum. Regardless of public opinion, they form a clear boundary in the sector between what is considered “serious” investing and what is downright gambling. And as long as the price goes up, everyone has fun. The persistence that goes with it can quickly be underestimated. From a safe distance and without your own investment, every memecoin season has a certain entertainment value. And who knows if it’s just beginning or if it’s long gone?

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