The pace with which the cryptocurrency market is evolving is hard to describe in clear words. Because by the time you would witness the dust settling over the surge of a crypto token, a new obscure token would, more often than not, upstage the previous star in no time.
This is exactly what is happening to the meme coins where the latest star is the now popular meme coin — Floki Inu.
When Elon Musk tweeted an image of his Shiba Inu pet on September 13 with a caption ‘Floki has arrived’, the meme coin Floki Inu rose by 1,000 percent in mere two days.
This was the beginning of a rapid rise in the price of this meme coin. This cryptocurrency is community owned and inspired by Tesla and SpaceX boss Elon Musk’s Shiba Inu, as mentioned on Floki’s website http://theflokiinu.com.
The coin was created in August 2020 by an anonymous person known as Ryoshi.
From March this year, Elon Musk is seen to be throwing his weight behind the project. In March 2021, he tweeted ‘I am getting a Shiba Inu’. Later, he tweeted in June, ‘My Shiba Inu will be named Floki’.
Floki Inu now trades at $0.00007731 and has a trading volume of a little over $16 million. This means you can buy 1,00,000 coins for a mere $7.7. In just 24 hours on October 18, the crypto coins rose by 24 percent, according to coingecko.com.
However, the price rise doesn’t mean any substantial gain in view of the abysmally low price.
In the past two and a half months, however, the meme coin rose 1,200 percent between August 1 and October 15. It rose from $0.000005 a piece on August 1 to $0.000065 on October 15. In two and a half months, it rose over 1,200 percent. This means if you invested merely ₹500 on August 1, it would have grown to ₹600,000 on October 15, as per the data on Coincodex.
What is a meme coin?
Meme coin is a cryptocurrency associated with a theme. The first meme coin was Dogecoin that was named after a popular dog. The other meme coins include Shiba Inu and Floki Inu.
Meme coins are hyper volatile cryptocurrencies, although there does not seem to be a substantive reason behind this awe-inspiring jump.
Experts try to unravel the reasons behind the massive rise of these meme coins. One reason that they propagate is the presence of a strong community behind these coins. Another is the presence of strong personality cults behind these coins. Elon Musk, for instance, has thrown his weight behind Floki Inu through his tweets.
The third reason is that the low entry level prompts retail investors to make a beeline for meme coins, thus pushing their price higher.
Indian crypto exchanges on meme coins
Despite the mind-boggling growth of these coins, Indian cryptos are not keen to jump the proverbial bandwagon.
Sharan Nair, chief business officer of CoinSwitch Kuber, explains the reason for the aversion, “Exchanges like us don’t list these coins is because unlike western markets, in India, we focus a lot on customer protection and prioritise it the most, which I feel is the right thing to do. We take a wait and watch approach towards these coins to ensure that the customers shouldn’t lose money investing in them.”
He also plays down the sudden price rise of meme coins as he states, “All these coins are trying to replicate the so-called success of DOGE coin. Investors in these coins are usually newbies and want to quickly make money. They don’t understand crypto or blockchain.”
To summarise, we can highlight that meme coins are hyper volatile, even more than the otherwise volatile standard cryptocurrencies such as BTC, ETH, XRP and ADA. Unfortunately, there are no strong fundamentals behind the ascent or fall of meme coins, and which one would be the next one to rise and when — one could not say for sure.