In 1984, a television advertisement for Kit Kat chocolate bars featured a scene where a band played their demo for a disinterested music executive. The manager’s response was, “You can’t sing, you can’t play, you look awful… you’ll go far.” This, to some extent, reflects the appeal of memecoins to sensible and intelligent people. Despite their lack of utility and inherent volatility, smart investors have managed to make significant profits by trading memecoins.
According to On Yavin, co-founder and head of business at Syndika, anyone who claims to have a trading strategy for memecoins is simply talking nonsense. He attributes the recent surge of interest in memecoins to the bear market and the desire for quick profits. People are looking for opportunities to make money and are not interested in investing in projects that take years to develop.
Even the smartest individuals in the industry have made substantial gains from memecoins. Ethereum co-founder, Vitalik Buterin, turned a $25,000 investment in Dogecoin into millions. While Buterin admits that he did not anticipate such high returns, he considers it one of his best investments. He donated his profits to charity.
Tom Mitchelhill, a financial journalist, finds memecoins both financially interesting and culturally significant. He believes there is something captivating about memecoins that attracts a large number of people to get involved.
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When it comes to investing in memecoins, experts have different perspectives. Evgen Verzun, director of Kaizen.Finance, suggests that investors should look for the next opportunity after missing out on popular memecoins like Dogecoin. One such opportunity that gained significant attention this year was PEPE, based on the popular crypto meme of Pepe the Frog. Mitchelhill appreciates the irony that PEPE’s founders emphasize its uselessness, which adds to its appeal. The market cap of PEPE reached $1.5 billion in early May but has since seen a significant drop followed by a slight increase.
While investing in memecoins can be risky, it is not uncommon for smart investors to make profits by buying in early and selling before prices plunge. Mitchelhill prefers to invest small amounts and exit with more, rather than taking big risks. He recommends having a clear plan for when to take profits, as many investors tend to wait for prices to go higher or recover their initial investment.
Sara Jane Kenny, an Algorand ambassador and founder of OffChain Ireland, believes that researching, practicing patience, and being efficient are the keys to making money while trading memecoins. She encourages investors to research the token’s origin, team, community, and progress. Kenny also emphasizes the importance of transaction fees, speed, and different prices across different decentralized and centralized exchanges. By observing market patterns and timing, investors can buy low and sell high. Kenny advises taking profits gradually and only investing what one can afford to lose.
Kenny believes that the best memecoins are those with a strong community, some utility, and even a sense of humor. On the other hand, investors should be cautious of memecoins with red flags such as creators holding the majority of tokens, anonymous teams, no progress, or a community dominated by bots.
Harry Horsfall, CEO of Flight3, believes that being early in the memecoin market is crucial to success. He asserts that taking risks and getting in early is a characteristic of winners. Horsfall, a successful Web3 entrepreneur, enjoys dabbling in memecoins due to the potential for significant gains.
In conclusion, trading memecoins is a risky venture with the potential for substantial profits. While some experts claim that there is no smart approach to trading memecoins, others believe that careful research, patience, and market observation can increase the chances of success. Whether memecoins are seen as culturally significant or just a means of making quick money, the appeal to both smart and not-so-smart investors remains high.
