Why New Investors Like Meme Tokens Such As Dogecoin and Shiba Inu
Since Bitcoin reached a record high of nearly $69,000 a while ago, more and more people have become interested in cryptocurrency. Novice investors appear to be more interested in investing in meme tokens such as Dogecoin and Shiba Inu, and this trend appears to be growing. Shiba, for example, recently surpassed two million official Twitter followers, even surpassing Ethereum’s 1.8 million followers. According to independent statistics on the company’s official website, the number of Shiba token holders has recently surpassed one million. Shiba’s total market value has exceeded $20.2 billion, ranking 13th against all cryptocurrencies, while Dogecoin is valued at $28.5 billion, ranking 10th.
The popularity of dog-themed meme tokens
Nonetheless, falling prices are putting a strain on these dog-themed meme tokens. At the time of writing, the trading price of SHIB on the BigONE Exchange is $0.000036, a drop of more than 50% from the peak of $0.0000879 on October 27, and a drop of 3.63% in the previous 24 hours. Dogecoin fell by 1.01% as well. Both current prices are significantly lower than their historical highs. But despite the fact their prices have fallen for a variety of reasons, they are still highly sought after by new cryptocurrency investors.
Why new cryptocurrency investors are attracted to meme tokens
Due to the rapid growth of meme tokens, BigONE analyzed some of the reasons why they are sought after by novice cryptocurrency investors.
● Brand recognition: a strong brand helps reduce the effort for people to understand them. Cryptocurrency, blockchain, NFT, smart contracts, etc. are all complex investment topics that require a lot of time to learn. Even though we are writing articles about content every day, we still need to constantly learn related knowledge. A strong brand advantage is a shortcut to learning, just as you would naturally know what brands such as Nike and Coca-Cola do. The accessible nature of meme tokens allows them to convey similar easy-to-learn brand attributes, so novice investors do not need to conduct too much research and learning and can feel at ease about their investment decisions.
● Active community: the Doge and Shiba communities are one of the most loyal and active communities in the entire cryptocurrency. Although novice investors can use the community to make themselves less confused when they first get in touch with cryptocurrencies, there may also be some flawed ideas and wrong investment recommendations in the content of these communities. Even some outright lies and fraud. Nevertheless, an active cryptocurrency community can still make people feel comfortable and safe. What novice cryptocurrency investors lack most is information and guidance when they first start; an active community will help to verify the investment decisions of most novice cryptocurrency investors.
● Cheap entry point: the token price of each meme token is very cheap. The current price of Doge is less than $0.2, and the other meme tokens are less than $0.002. This ultra-low price makes many novice cryptocurrency investors believe that if they have tens of thousands, hundreds of thousands, or even millions of tokens, they can become very rich when the price rises just a little. But what they don’t know is that the actual value and the price of cryptocurrency are different. This is like the relationship between the face value of a banknote and its exchange rate. It is not necessarily that a banknote with a large face value has a high value. There are many factors that determine the value of cryptocurrency, such as its application scenarios and future plans. Unfortunately, many novice cryptocurrency investors seem to ignore this.
Meme tokens and their challenges
Both Doge and Shiba have an unlimited supply of tokens to be mined. From an economic point of view, this violates the law of scarcity, which is like the principle of how rising prices drive inflation. “Economics 101 teaches that the more of something that’s available, the less valuable it becomes. That’s a big problem facing fiat currencies, which continue to flood markets with new money, and it’s also a problem for meme coins,” according to an analysis of meme tokens in Fool.com.
Another challenge facing the meme token is that its current limited application scenarios, coupled with the lack of future development roadmaps, have not made people full of confidence with the dog-themed meme token. Especially when the concept of the metaverse became popular recently, some related tokens exploded, such as Ethereum 2.0, Chainlink, Cardano, Decentraland, Energi and other breakthrough projects. All these projects have different practical applications compared to meme. Although for novice cryptocurrency investors, meme tokens may be a shortcut into the cryptocurrency world, but with the continuous emergence of other high-quality projects, the challenges faced by meme tokens to sustain their value only increases.
Take a look at liquidity mining on BigONE
For many novice cryptocurrency investors, buying meme tokens to participate in spot trading is the most common investment method, but are there other ways to earn an income by investing in meme tokens? The short answer is yes. The liquid mining products recently launched by BigONE can meet the investment needs of novice investors.
Automated market makers (AMM) allow users in centralized exchanges to become liquidity providers by adding liquidity to the liquidity fund pool, and then get the commission paid by the platform. AMMs calculate the buying and selling price based on the “constant product market maker model”. BigONE adopts the combination of AMM + order book for the trading mechanism. The system will place the funds in the fund pool in the market according to the AMM automatic market-making algorithm to provide liquidity for the market. And the good news is like investing in mem coins anyone can participate in the AMM liquidity mining service.
So, if you are a firm long-term holder of a certain cryptocurrency, such as SHIB or BTC, then BigONE highly recommends you use liquid mining services, which can allow you to hold cryptocurrencies and make profits due to the increase in currency prices, as well as earn an income from liquidity mining. We will increase the number of mining and listing projects, using the level of user support to assess whether to list or not. This underlines the fact that the liquidity mining on BigONE is user-led, and consequently it’s our users that will determine projects they want to see listed on our exchange.
