Note

Looking for the next Dogecoin or Shiba Inu? Key factors to help you find the next hot meme coin in 2022

Verified Official
· Views 2,671

Happy holidays! Welcome to Distributed Ledger, our weekly crypto newsletter. I’m Frances Yue, crypto reporter at MarketWatch. Today we have a special edition – an outlook for meme coins in 2022, as we are approaching the year-end. Check out a more comprehensive outlook for the crypto space here, and find me on Twitter at FrancesYue_ to send feedback or chat about crypto.

Subscribe here to the DL newsletter!

Crypto in a snap

Major cryptocurrencies have been trading sideways for the past week. Bitcoin BTCUSD traded 0.2% lower from seven days ago, recently at $48,609, according to CoinDesk data. Ether ETHUSD lost 2.1% over the past seven days, recently trading at $3,942. Meme token Dogecoin DOGEUSD was down1.5% from seven days ago, while another dog-themed coin Shiba Inu SHIBUSD gained 8.5% over the past seven days.

Crypto Metrics
Biggest Gainers Price % 7-day return
yearn finance $32,019 52.2%
NEAR protocol $13.7 41.2%
Terra $92.3 39.5%
Celo $4.83 33.8%
Aave $238.7 33.5%
Source: CoinMarketCap.com as of Dec. 23
Biggest Decliners Price % 7-day return
Elrond $255.6 -21.9%
Kadena $11 -19.3%
XDC Network $0.08 -14.2%
Waves $16.3 -10.4%
PancakeSwap $11.7 -9.4%
Source: CoinMarketCap.com as of Dec.23
Meme coin 2022?

For the past year, some meme coins, which are cryptocurrencies that emerged from internet memes, posted staggering results. Dogecoin, a token that was created as a joke and inspired by the dog Shiba Inu, rose more than 3,300% since the start of the year, according to CoinDesk data. Shiba Inu, which originated from the same dog breed, was up more than 45,500,000% year-to-date.

Such results have propelled some investors to the hunt for the next meme coin stars. However, the current market environment may not help with the rise of any new meme coins, Christopher Vecchio, senior currency strategist at Forex analysis site DailyFX, told Distributed Ledger in an interview.

“In an environment defined by weaker major cryptocurrencies, it lacks the confidence for retail investors to try to jump into a new listing and try to strike it big very quickly,” Vecchio said. 

As the Fed speeds up its tapering of its bond purchase program and penciled in three interest rate hikes in 2022, major cryptocurrencies have been under selling pressure. Bitcoin is down almost 30% from its all-time high of $68,990 in November, while ether is down more than 18% from its record high of $4,866, according to CoinDesk data. 

Increasing institutional participation in the crypto market might squeeze the room for meme tokens, some analysts said. “As the market becomes more efficient, and more smart money comes in, there’s less retail money,” said Jason Desimone, head of blockchain at crypto-focused software company Ubik Group. “I think we’re gonna see more value flowing to coins that have actual utility versus just a community following.”

Guy Gotslak, president and co-founder of crypto investment platform My Digital Money, disagreed. “I think in the next three to five years, more serious investors will start getting into meme coins,” according to Gotslak.

“I do see some meme coins evolving next year to potentially having more utility, such as being used for payments,” Gotslak said, pointing out that Elon Musk said Tesla TSLA would accept Dogecoin as payment for merchandise, while AMC AMC CEO Adam Aron said the movie theater chain will accept Shiba Inu as payment.  

Invest, or not, with caution 

Investing in meme tokens is not always a safe bet, analysts said. “A lot of people will gamble on these coins trying to pick the next Doge or next Shiba,” Desimone said. “And a lot of people get burned along the way.”

Industry participants stressed that it’s important for investors to always practice caution when deciding which tokens to invest in, and try to steer away from scams such as a “rug pull”, which refers to the circumstances in which developers abandon a project and flee with investors’ funds. 

One example is Squid Game (SQUID), a cryptocurrency that has drawn attention in part because of the popular namesake Korean TV show. The token surged to $2,857 from $39 in just three hours and then collapsed to nearly zero. On-chain data and evidence from Twitter and Telegram suggested that developers gave up the project and cashed out the tokens. 

There were some early signs – some investors reported that they can only buy but not sell SQUID, while there were several spelling errors in the crypto’s white paper. 

When vetting crypto projects, investors should look into the developing teams’ track record and verify if they are legitimate, Gotslak noted. It’s also crucial to look at the token’s distribution model. “You don’t want the founder team to own too many of the tokens,” Gotslak said. “Because that can be risky, right? They could just cash out and run off.”

“Make sure that not one single person has more than 5%,” Gotslak added. 

A common character that defines successful meme tokens, is that they usually have a strong community around them, analysts said. “It really centers around doing something unique that really grows and engages in the community, something that hasn’t been done yet,” said Ubik’s Desimone. 

The push from a celebrity such as Elon Musk could also help, according to DailyFX’s Vecchio. Usually, it is “someone who’s pumping the name of their own volition,” Vecchio said. 

Crypto companies, funds

In crypto-related company trading, shares of Coinbase Global Inc. COIN  traded down 1.3% to $257.94 Thursday morning. It was up 4.3% for the past five trading sessions. Michael Saylor’s MicroStrategy Inc.  MSTR  traded 1.1% lower on Thursday to $593.77, and inched 0.03% lower over the past five days.

Mining company Riot Blockchain Inc.  RIOT  shares fell 0.9% to $23.42, contributing to a 2% loss over the past five days. Shares of Marathon Digital Holdings Inc. MARA   traded down 0.4% to $33.94, and down 4.4% over the past five days. Another miner Ebang International Holdings Inc.  EBON  was flat at $1.13, with a 10% loss over the past five days.

Overstock.com Inc.  OSTK.  traded down 0.6% to $61.61. The shares went down 4.3% over the five-session period.

Block Inc’s shares  SQ fell 0.9% to $166.07, trading flat for the week. Tesla Inc.’s shares  TSLA  traded up 2% to $1,029, contributing to an 11% gain for the week.

PayPal Holdings Inc. PYPL  inched down 0.04% to $191.75, while it recorded a 1.6% gain over the five-session stretch. NVIDIA Corp. NVDA   gained 1% to $297, and was looking at a 4.6% advance over the past five days.

Advanced Micro Devices Inc. AMD  was up 1.6% to $146.2 and logged a 5.5% gain over the past five trading days, as of Thursday morning.

In the fund space, ProShares Bitcoin Strategy ETF BITO was 0.5% lower to $30.9 Thursday, while Valkyrie Bitcoin Strategy ETF  BTF  was down 0.6% to $19.07. VanEck Bitcoin Strategy ETF  XBTF  fell 0.41% to $48.35.

Grayscale Bitcoin Trust GBTC  was trading at $36.75, off 0.75% Thursday morning.

Must Reads
  • Jack Dorsey blocked on Twitter by Marc Andreessen after Web3 comments (CNBC)
  • The New Get-Rich-Faster Job in Silicon Valley: Crypto Start-Ups (The New York Times)
  • Market Wrap Year-End Review: Bitcoin Peaks as Coinbase Goes Public (CoinDesk)
  • China’s State Media Xinhua to Issue NFTs Amid Crypto Crackdown (Bloomberg)
  • This mom quit her job to focus on crypto full time and build ‘generational wealth.’ Now she makes around $80,000 per month (CNBC Make It)
  • Crypto mayors on the rise (Tech Crunch)

Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

FOLLOWME Trading Community Website: https://www.followme.com

If you like, reward to support.
avatar

Hot

Trading has been more easier with the help of Laurie A Grayson , Message her on face📈book➡️ Laurie A Grayson 📊
My first experience with her gave me the assurance that have made me invest without the fear of losing
investing with the right source is the best.Write her on facebook 👉Mrs Theresa B Lynch➡️What 👥sApp +1(213) 354-7323

-THE END-