Is Having a Lot of Meme Coin Bad for the Crypto Market

Meme coins are those type of cryptocurrencies which are originated from an internet meme mainly used for entertainment or fun. Like if I talk about Doge Coin which is the top meme coin out there having a character of Dog. It was created to make a payment system as a joke and thus now it became so famous that it is the Top 10 crypto out there by market cap. The problem is the meme coin holds very little or actually no intrinsic value.

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Like DogeCoin, Shibu, Floki, Pepe are some of the Meme coins which people buy thinking it will make them rich. It has made a lot of people rich in the bull run actually but having these coins on top of the market cap good for the crypto actually.

What is Meme Coin

Meme coin is a type of crypto currencies created out of a meme, funny videos, texts or anything funny. Though crypto actually is a volatile asset, these coins are much more volatile and usually refereed as pump and dumo coins. Some of the Meme coins have given 10x to 100x returns in the past too and thus these are favorite for crypto investors because they think it makes them rich.

Use Case of Meme Coin

Since the Meme coins are created as a joke, they do not have any intrinsic value as such. To be honest they are not the serious form of currency and these coins are mainly used for speculation and trading purpose. Most of the people invest in these types of coins thinking that if it becomes profitable, it can give them huge returns in the future. The bigger coins cannot become 10x to 100x but these coins can grow. But on the other side, these are highly risky assets and can make your investment become zero too.

Why it is Bad For the Crypto Market

I know people love Meme Coins as it gives them huge investment returns. But the problem is since it does not have any intrinsic value, these are mainly used for speculation purpose. They don't have any business model or they are not earning any money as such.

If we compare two crypto, one being the Meme coin and one of a business which actually generated revenue. The coin which actually generates revenue should have more market cap than the meme coin to be honest. Because of these coins, the market becomes more volatile as mostly people pump and dump these types of coins.

If I compare Hive and any other Meme Coin, Hive has a great value. Hive helps bloggers to generate revenue through blogging/threading/Commenting. Also there are Layer 2 coins on Hive which has different use cases like Games, Communities, etc. Similarly if we compare the market cap of the Hive and some of the famous Meme Coins, Hive is below 10 or more Meme coins in the Market Cap. That means a coin which has so much use cases is not even top 300 crypto by market cap where as 13 Meme coins.

For the crypto market to reach in every household there should be crypto's or coins which have a great use-case and can generate revenue in the long term and not just some Meme coin which is used for speculation purpose.

But as of today, more and more people are running after the meme coin because they are famous as well they gain huge money out of it. I will not be surprised seeing more and more Meme coins getting listed because of its priority.

What do you think, is Meme Coin Bad for the Crypto Market.

Posted Using InLeo Alpha