Memecoins or shitcoins are cryptocurrencies inspired by memes or jokes on social media and the internet. Although they are generally considered extremely risky investments due to their negligible value and utility, it has often been proven that they may generate substantial profits for crypto traders and investors.
Recently, there has been an ongoing memecoin bull run fueled by $PEPE. This frog-themed meme cryptocurrency has established its dominance in cryptocurrencies and rapidly transformed into the latest viral memecoin.
$PEPE was launched earlier this year by an anonymous group of developers, and its rise in the crypto market has been nothing short of extraordinary. According to Messari, a crypto research group, the memecoin recorded blockchain holders surpassed 100,000 just 22 days after its launch. This metric outpaced that of several other prominent memecoins like Shiba Inu.
Importantly, research has shown that Nigerians and Africans play a significant part in this new trend. According to a Coingecko report released earlier this month, Nigeria ranked fifth in ten countries with the most interest in memecoins, accounting for 4.92% of the overall interest in memecoins.
The second African country on the list is Morocco which ranked tenth and accounted for 1.2% of the total interest in meme coins. This suggests that Africans are silently watching memecoins and making profits with them.
This article is dedicated to all the new traders and investors who just joined the memecoin wave. It is pertinent to note that memecoins investments risk losing everything because they lack fundamental value and are prone to significant losses in a bear market.
Therefore, this article tips traders on the fundamental rules of investing in shitcoins branded as memecoins with no intrinsic value. Below are a few tips and guidelines to tread the path carefully.
Take a second look
Like the popular crypto parlance: Do Your Own Research (DYOR) before committing funds to any crypto project. Before investing in a meme coin or shitcoin, thoroughly understand the risks involved.
Memecoins can crash unexpectedly, and scammers always watch the market waiting to exploit hype and scam unsuspecting traders. Although the allure of quick gains may be tempting, remember that meme coins are highly risky investments, and their values can be unstable, with sudden price drops.
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So before investing, observe their impact on the broader cryptocurrency market.
Take profits
This may be hard to practice, but maximise profit-taking when your memecoin experiences a price surge. Remember the saying: no one goes wrong by taking a profit.” Also, when it goes the other way, when the value declines, cut your losses quickly.
It is a fast-paced market, and taking a break from your computer puts you at risk of missing out on opportunities. To avoid losing out, set up price alert reminders on your trading platforms and ensure you can trade on your phone while away from your computer.
Monitor whale movements
Most of the memecoin price movement is determined by actions of large holders of the tokens, known as whales. So it is essential to pay attention to the actions of these major players in real time because dumping a large portion of the tokens signals a downward movement.
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This could be done by monitoring tweets of whale movement trackers like Whale Alert. In a nutshell, following these guidelines is crucial while navigating the murky waters of the memecoin/shitcoin ecosystem.
There is no denying the fact that many have found success investing in these high-volatility coins, but some have also suffered significant losses. So it is important to stay informed and approach investments with caution.
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