Original title: An Investor Guide to Memecoin Mania

Original author: Arjun Chand

Original translation: Frost, BlockBeats

Editor's note:

This article explores the recent "Memecoin mania" in the cryptocurrency world from an investor's perspective. It also suggests that a more conservative investment strategy can be used, that is, to secure basic assets by investing in more stable digital currencies such as Bitcoin or Ethereum, while freeing up some funds to participate in the high-risk but potentially higher-reward Memecoin strategy.

“Your friend knows next to nothing about crypto, but he’s already rich.” “Why?” “They bought a token with a dog in a hat on it. The hat stayed on, so the price kept climbing.” “Got it.”

The community raised $650,000 to light it up, and this Memecoin is about to go mainstream in the Las Vegas sphere.

Memecoin is now very popular

Historically, Memecoin has been one of the best performing assets. Let’s take a quick trip down memory lane and look at some of the brightest stars in the Memecoin galaxy:

Dogecoin (DOGE) — Musk’s favorite meme, once featured on SNL, is now Memecoin history, with a current market cap of $20 billion.

Shiba Inu (SHIB) - This is the Beta version of the meme that follows in the footsteps of DOGE. It is currently only one place behind DOGE with a market value of over $10 billion. At its peak, it even reached an astonishing $40 billion, a return rate of 8,000 times compared to the beginning of 2021.

Pepe (PEPE) - PEPE reached a market value of $1 billion within a month of its launch, and its current market value remains at $3 billion.

Bonk (BONK) - Memecoin is one of the main catalysts for the revival of the Solana ecosystem. Bonk soared from a market value of $30 million to $1.5 billion in just over a month (a rapid increase of 50 times).

Dogwifhat (WIF) — Dogwifhat once set the Wall Street bulls on fire, and the heat remains high. With a market cap of $2.25 billion, WIF is the leader among Solana Memecoins.

A famous infographic about Memecoin by DegenSpartan.

But let’s be honest, Memecoins are a gamble. There is no foolproof strategy for buying them — either you go “TO THE MOON” or you see all the assets you invested disappear. The jury is still out on whether Memecoin is good or bad. But one thing is certain: Memecoins have become an integral part of the bull market. They are attracting people to the chain and promoting cross-chain activities.

Memecoin Evaluation Guide

The following points are a guide to evaluating Memecoin, these tips can help readers set standards and define what kind of Memecoin is worth buying. Let's take a deeper look!

Build a Trustworthy Network

Don't get your alpha from your favorite Twitter KOL.

Timing is everything in cryptocurrency, especially Memecoin. Buying early or late may determine whether you end up with a 5x or 100x return. To buy early, you must understand the "Alpha Chain" and how information flows.

If readers get Memecoin information from Twitter KOLs with a large number of followers, it may be too late. This may mean that early profit-taking is ready to "get off" and you have no choice but to become a "community member".

It’s impossible to follow the crypto market every minute and be the first to jump on every opportunity, so it’s important to form a team with friends you’ve met during the bear market — people you can trust and who have similar interests to you.

With your team, you can cover more ground, pool insights, and validate each other’s hunches. If most people in your team think a particular Memecoin looks promising and has a good chance of going further, your chances of making the right decision will increase.

It’s like having a group of friends who can help you discover the next big thing - if you all agree on the meme, then you’re more likely to think it has potential. But if you try to figure it out on your own, sometimes you might fall short.

Make the most of data tools

In order to make smart investment choices, you need the latest and most accurate information. Sites like Dexscreener and blockchain explorers are great tools for gathering the necessary data.

For Memecoin, for example, token distribution is a key metric. It tells you if Memecoin has real community support or if it’s just a few insiders trying to make a quick buck by pumping and dumping.

Here’s how to view Memecoin token distribution:

Spot whales - Enter the contract address of a token using a blockchain explorer. Click on the “Holders” section to see how the tokens are distributed among the holders. The best case scenario is that no one whale holds the majority of the tokens.

Healthy Propagation and Growing Token Holders – Good token propagation generally means a stable and large community. If you notice a diverse group of holders slowly but surely accumulating more tokens, it could mean they believe in the future of the token.

Fair Launch – Focus on the initial distribution of tokens after the launch. The initial distribution model needs to be fair and equitable, and not give a disproportionate amount to the development team or early investors.

Track How Projects Operate

For any cryptocurrency project, whether it’s a memecoin or one that caters to a niche, having a solid image is key.

If you think a meme has potential, make sure they have shown some traction in terms of the field they operate in.

Source: @kelxyz_

This means a beautiful website, an eye-catching Twitter account and an active Telegram group chat are all indispensable. They are the pillars of communication, community and branding - the very things that can make or break a project's reputation.

The project website is the official billboard for the project. That's where Memecoin comes into its greatest effect. The Telegram channel is where the community hangs out, where you can see active community members and memes. And Twitter? That's the megaphone. It broadcasts the Memecoin story to the world. Memecoins that gain a foothold on these platforms, combined with humor and community engagement, are more likely to attract market attention and become huge successes.

Know Your Limits in the On-Chain Casino

Remember the Golden Rule: Only bet what you are comfortable losing.

Memecoins are fun and can go to the moon quickly, but they are unpredictable and you can easily lose it all.

The high volatility of Memecoin means the risk of loss is high, so don't gamble with your savings, but maybe bet with your lunch money on some days.

Some investors use a barbell strategy, balancing ultra-safe bets (e.g. BTC, ETH, SOL) with the high risk of Memecoin. This way, you can enjoy the thrill of Memecoin while maintaining a solid financial foundation that is not affected by Memecoin's volatility.

Don't mid-curve it. Embrace the memecoins.

Also, think of Memecoin as an on-chain PvP battle - the fool theory often prevails. Ask yourself: "Would someone else be willing to buy this coin at a higher price than I paid?" If you're not sure, it might be time to take profits and avoid regrets later.

Are we in the Memecoin super-flywheel phase? Who knows, but one thing is certain: Memecoin is not going away. They are fun and have the best chance of interesting outcomes. Enjoy the Memecoin playground while we are in a bull market, but don't risk too much in the hope of getting rich overnight. Time in the market is of the essence, so make sure you don't ruin yourself with Memecoin or leverage.

Invest wisely, be patient, and we will all succeed!

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