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Are Meme Coins a scam? |Untold Story|

Meme Coins popped into existence a few years ago and strangely, it is creating a lot of millionaires along the way. Of course, there is no real edge if you are investing in them, but you cannot deny the fact that it has created enormous amounts of wealth for early investors.

The hype around this asset class is sky high and lately, many scam coins are also coming into existence at a rapid phase. While most Meme Coins fail eventually, you need to be careful about the choices you make because unlike traditional environments, it is too difficult to maintain a steady hedge.

On the flip side, if you just want to try your luck and see if you can catch a tide, then you should only invest the kind of amount that you can afford to lose. In short, getting involved with this asset class is nothing short of gambling and the probability is something that will never be in your favor unless you have a mathematical edge.

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    Nonetheless, a fundamental understanding is a must and the following paragraphs will provide you with all the important information you need in order to speed up the decision making process.

    Are Meme Coins a scam?

    Meme Coins History

    The Meme Coins trend started with Dogecoin. Initially, doge was created as a joke and even the creator himself did not hold on to his share of coins. It is true that this token had utility and transaction speed and mechanism were above par.

    However, as it wasn’t deflationary and had tons of competition from better networks and protocols, it didn’t offer any unique intrinsic value. Strangely enough, this asset also experienced wild swings and created a vast number of millionaires.

    The hype created by billionaires also helped push the price up, but a crash was imminent and the price currently is experiencing a correction. Rise and fall of this coin at such an exponential phase is the main thing that inspired a lot of other coins that are just made for laughs for the most part.

    How to get involved?

    Choices available to you in the crypto space are enormous to say the least. Thousands of coins are present and every project claims to be the best in their respective fields. While things always look good in theory, the price action will reveal the ugly truth sooner or later. If you want to try your luck, then make sure that you are doing it correctly. For starters, always buy coins using reputable exchanges only.

    Do not ever invest more than you can afford to lose. More importantly, take professional advice if you feel the risk is too large. You might make easy money every once in a while, but do not let it blind you.

    Always remember that meme tokens are volatile and they can go south at any period. So, be risk averse and ensure security of your capital by choosing the correct medium. Keep an eye on slippage as well and for best results, deal with coins that have a large market cap.

    Precautionary Steps while investing in Meme Coins

    We covered the correct way to buy Meme Coins above. However, buying is only one tiny aspect of getting involved. As this space is insane in terms of volatility, you need to have an exit plan ahead of time. We suggest looking for tokens that have a strong community behind it.

    If developers of a project are known, then it is a positive sign. Unfortunately, there is no sure thing in this space, but if you diversify enough, chances are you might get the winning ticket at a bargain price. Things like liquidity pools, spreads and white-paper are something you should be aware of.

    Also, do not forget to take a look at tokenomics and only bet on things that you truly understand. After all, there isn’t any point in chasing random tokens, right? 

    Meme Coins and FOMO

    Most Meme Coins have become a type of pump and dump scheme. Due to loose regulation, the creators are not facing much consequences. As there are too many scam coins floating around, you should be a bit careful. If you have done your research and have found a coin, then focus on the community and users.

    If the only narrative the community has is to create MLM type hype, then it is wise to move away from them. Remember, marketing is a necessary component, but if the underlying project acts like a cash grab, then it can never end well.

    Thanks to blockchain technology, you can look at the cash inflows and outflows which is more than adequate to help you draw actionable intelligence. Fear of missing out is a real concern and it is mainly caused by impulsive action. So, be patient and do not pull the trigger unless you have an exit plan. 

    Community

    Just like everything in life, Meme Coins also depend a lot on the community and user base. Any token with a loyal following is bound to stay around for longer. Nowadays, people use certain gimmicks like high transaction fees and distribution of tokens to holders to retain people.

    However, if you look closely, it is quite easy to spot the ones that will inevitably bite the dust. Ideally, the project should have some degree of practicality and it should not be something that is going up in value purely because of marketing. Just by doing a search in related forums, it is easy to gauge things. In other words, doing background search is a must and it will shield you from a lot of harm.

    Bottom Line

    Meme Coins are controversial. It indeed has created a wave of millionaires, but it carries enormous risk too. Moreover, the number of choices available is also plenty and finding the next big thing is nearly impossible. So, be focused, take professional help whenever it is necessary and do not chase unrealistic returns. 

    Are you invested in any Meme Coins? Let us know your opinion by leaving a comment below.

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