Why do most of the meme coins fail?
If you are an investor in meme coins, the chances are big that you have lost money this year, as it was one of the worst years in the crypto sphere, especially in the meme coin sector. In this article, I will try to find the answers to why most projects have no future.
We are in a bear market
This economic downfall was “programmed” from the 2008 financial crisis, the seemingly good solutions just prolonged the upcoming disaster. The last decade was probably one of the best in the last 100 years of history.
The markets were in a constant uptrend, and it seemed like it will continue forever until the COVID-19 pandemic started to rule the world. I am a bit suspicious about the timing and the effects of this event, but it’s a subjective topic.
Surprisingly, this event kickstarted a massive bull run paradoxically after a massive drop due to fear. In my opinion, it was purely driven by institutional activities, and the internet gave these entities the power to suck everyday people into the machine just to use them as exit liquidity and let them spend their stimulus checks on crypto.
The influencers were promoting trading, and cryptocurrencies all over social media platforms, even big names like Michael Saylor. Do you really think this man wants you to be successful? He was shilling Bitcoin the most when it was at its all-time high.
Not to mention what Elon Musk did. In February 2021, Tesla announced it will invest 1.5 billion in Bitcoin, and it was the beginning of the massive crypto bull run. After that we had another China crypto ban, then Elon Musk just “found out” that Bitcoin was not environmentally friendly, and after the next leg up he sold most of his investment. We had a massive crash, then the final stage of the manipulated bull run started.
Then again a China FUD of the Evergrande collapse, and the nail in the coffin was the Russian war against Ukraine. The inflation is out of control, and 40% of the total supply of USD was printed in 2021. As Russia is the main distributor of oil and gas in the European Union, the prices started to increase rapidly.
The economy is about to go into a recession.
The meme coin sphere is the playground of serial scammers
There are many different types of cryptocurrency scams, and new ones are constantly emerging. Here are a few examples:
- Ponzi schemes: These scams promise high returns to early investors, but in reality, they are using the investments of new investors to pay off earlier investors. Eventually, the scheme collapses, and investors lose their money.
- Phishing attacks: These scams use fake websites or emails to trick people into giving away their login credentials or private keys, allowing the attackers to steal their cryptocurrency.
- Investment scams: These scams promise high returns on investments in cryptocurrency, but the investments are actually fake or do not exist.
- Pump and dump schemes: In these scams, the perpetrators artificially inflate the price of a particular cryptocurrency by promoting it heavily and then selling it off, causing the price to crash and leaving investors with losses.
- ICO scams: Initial coin offerings (ICOs) are a way for companies to raise money by selling tokens, but some ICOs are scams that promise a new cryptocurrency or product that never materializes. Source, ChatGPT
It is important to be vigilant and do your research before investing in cryptocurrency or providing personal information online. If something seems too good to be true, it probably is.
The get-rich-quick schemes will never run out of fashion. These serial scammers know how badly the everyday hard-working people want to get out of the rat race. The best part for them is they can do it completely anonymously. The regulation of the crypto world is near, and the scammers just help the process next to institutional manipulations.
It’s called the wild west for a reason, you might get robbed at any given moment.
The short-term mentality
If you are familiar with crypto slang, you know what jeet means. The mentality of the meme coin investors is chaotic. When they start to see red candles, it’s game over, they sell even at a loss just to jump into another project and repeat the circle.
The panic started, and the Telegram groups just started to be very negative due to dissatisfaction. It’s a chain reaction, and many times it’s final.
The everyday people don’t look at the quality factor, they want fast gains, and many times they buy into a project at its all-time high.
Investing for short-term gains leads to constant chart checking, and selling for no reason.
Crypto influencers are not your friends
Most of the projects are pumps and dumps. That’s the harsh reality. These crypto influencers are not your friends, they are getting paid to promote any coins. There are exceptions of course. The meme coins are do-or-die “investments”.
Many times, these influencers are getting paid in tokens, so they will sell these tokens to cover the price of their services, and when they start to sell them the majority of the people will start to sell as well.
They are sharing the projects just to pump their own bags, so be very careful!
Lack of community activity
When it’s to meme coins, the community is the second most important thing next to marketing. Unfortunately, most people don’t understand this, they want fast results without doing anything.
The most important part of a successful meme coin is the active community. Without the community’s help, the developers can’t make it, they have a limited budget for marketing, and if there is no organic promotion, the project will most likely die.
Final thoughts
Never invest more than you can afford to lose! Most of the meme coins are gambles. You might hit the jackpot, or you might lose everything. You might treat meme coin investments as gambling, that way you won’t be too emotional.
In the end, I am not a financial advisor, just an average dude, I am just writing about my experiences. Let’s visit my video on how not to be a jeet to avoid the losing mentality.
