Is This The Real Life? Money Matters, Meme Coins, and a Myriad of Risks

The continued rise to prominence of emerging technologies has put the world’s understanding of money in a strange light. Over the past year, as cryptocurrencies and NFTs entered the mainstream, money has seemingly diverged from the realm of the tangible to the world of pretend — and, even more so, the value attached to them. The fact is, however, that money has always been caught up in this obscure state of being more than we would care to admit.

“Money feels cold and mathematical and outside the realm of fuzzy human relationships. It isn’t,” wrote Jacob Goldstein in his book Money: The True Story of a Made-Up Thing. “Money is a made-up thing, a shared fiction. Money is fundamentally, unalterably social.” Taking this into consideration, it would be undeniable to state the money, ever since its conception, has been nothing more than a collective myth the world has come to accept. Fiat currencies, for instance, are really just pieces of paper backed by stories told by governments. In the same manner, stock investments, crypto, NFTs, and the like all come with their own narratives.

But this has become even more apparent over the past year, especially with the case of GameStop, which unprecedentedly set into motion the era of meme investing. Who would have thought that a group of Reddit day traders could go against large hedge funds and have their way towards the end? Perhaps this could highlight a revolution in how people are seeing their investments or, rather, that something is very broken within the market itself.

Needless to say, meme investing has found its way even into the crypto scene as more and more meme coins are being created from interactions that started off as nothing more than a joke. Investors who engage in this type of trade don’t necessarily believe in the underlying value of their stock, but because it’s what’s “in” at the moment. “Everything’s hype, a social media world, right?” explained 40-year old NFT investor Calvin Becerra, who went viral himself last year after being scammed of his three bored apes.

While other cryptocurrencies are adamant about pushing blockchain tech further, meme coins simply exist for individuals to share a good time online. Their longevity may be questionable, but it can’t be denied that these digital tokens have gained a lot of traction, especially ones like Dogecoin, particularly because of the support it has mustered from well-known personalities like Snoop Dogg, Elon Musk, and even self-proclaimed God of Doge Gene Simmons. Herein lies the power of the narrative, as mentioned earlier.

The viral nature of memes — and in effect, meme coins — are fueled by hype and a seeming desire for everyone to always be in the know. Make no mistake, meme coins start off as a gamble in most cases and remain to be speculative investments as they take off. But, given enough backing from Reddit, social media, and influential individuals, they can manifest into something bigger and more “legitimate.” Moreover, the general lack of scarcity of meme coins adds to their appeal unlike Bitcoin, for instance, which is set to cap minting at 21 million coins.

Narratives and speculation, when combined together, make up a powerful force that can significantly sway the system. However, for more serious meme coin investors — which may sound like a contradictory phrase in itself — it’s also worth taking a look at their “use case” or if they have any practical use such as purchasing goods.

“I always look at who’s behind the project. Who’s tweeting about it?” explained Randi Hipper, also known by her Twitter handle Miss Teen Crypto. “People like Elon Musk started tweeting, and then [dogecoin] got serious. Then Mark Cuban got in and started accepting dogecoin payment for the Mavericks.”

“Elon Musk is such a huge figure into the space. Coming in and backing such a coin that really had no utility and then saying that you can maybe buy Tesla with dogecoin in the future really got everyone’s ears perked up.” backed fellow investor and handler of strategic partnerships at MoneyMade Ryan Fochtman.

“Now you can go online and exchange dogecoin or shiba inu for tickets to go to AMC. The more use case that we can kind of get out of these altcoins is going to make for a better, overall more fun space. It brings altcoins more mainstream, and now more and more companies I believe are going to start a kind of domino effect where they’re just going to start falling and accepting crypto,” he added.

But of course, as with any type of investment, meme coins — and even the emerging technologies scene, in general — come with their own set of risks. Just last week, playful banter between Elon Musk and McDonald’s gave birth to Grimacecoin, named after the fast-food chain’s iconic purple mascot. Musk first tweeted: “I will eat a happy meal on tv if @McDonalds accepts Dogecoin” to which McDonald’s, capitalizing on the free marketing moment, replied: “only if @tesla accepts grimacecoin.”

Countless big-name business have jumped on the crypto bandwagon, but McDonald’s has so far shown no intention of accepting or even creating their own digital coin. Crypto enthusiasts, on the other hand, took advantage of this innocent exchange and went ahead to create their own variants of Grimace meme coins. Some flopped, but others remained with one even reaching a market value of almost $300,000. Whether these cryptocurrency creators simply want to make fun of the latest trend or get rich quick by enacting a “rug-pull” from thousands of followers, it’s impossible to determine.

A rug-pull is done when an individual creates a cryptocurrency and then suddenly ends the project to run off with the investments. A similar case happened when the Squid Coin entered the market following the worldwide success of Netflix’s Squid Game series. In summary, Squid Coin reached a peak of $2,860 per token and just a few weeks after it debuted, its creator pulled the plug walking away $3.3 million richer.

Software engineer and Dogecoin developer Billy Markus notes that most meme coin creators “believe that if they can get in early enough, they can win the pump-and-dump game and dump before someone else does.” What sets Markus’s intention and token apart from the rest of the meme coins is that he just genuinely wanted to have some fun online. Just two years after releasing Dogecoin, he sold off his own portion of the cryptocurrency without getting rich. Given the prominence of crypto right now and comparing it to the past year, it has truly come a long way. But, the space has also become ripe for opportunistic scammers and hackers. Perhaps the main takeaway from all of this is to take meme coins, filled with rich narratives and deep speculation, with a grain of salt. At the end of the day, these are still investments, and big money — for all its recent disconnect from the real and tangible — can still be lost.

References: Vox, CoinDesk, Forbes