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The world has witnessed coins with apparently little to no potential gain enormous traction in the crypto market. Experts at a Huobi Research Institute-organized webinar discussed the factors that contribute toward a meme coin’s success. Investors, approach with caution.

A meme coin is largely known as a cryptocurrency that has its origins in an Internet meme or humorous characteristic, and many often have a reputation for being pump-and-dump schemes, lending illegitimacy, and an overall unsavory reputation for crypto trading.

While many such coins fade from the public eye eventually, the meteoric price runs of some beg the question: just what factors contribute toward a meme coin’s success?

The answer, according to panelists, lies in a combination of pro-common man and anti-elite sentiment, paired with high accessibility.

Meme coins share some common features such as a large issue size and low entrance price. The underlying idealism behind their creation and distribution often focuses on fairness and equality.

People love meme coins because they’re easy to identify with. Meme coins buyers are often lured by the promise of striking it rich overnight. They tend to low value coins, where one can buy a large volume for a small amount of money, so crypto newcomers get both a sense of satisfaction plus the illusion that worst-case losses are also minimal.

Meme coins also represent the rise of a counter-elite culture. The world has traditionally been controlled by elites, so the notion that history can be made by the power of everyday citizens is highly appealing for many.

The world has traditionally been controlled by elites, so the notion that history can be made by the power of everyday citizens is highly appealing for many.

Two conditions

Certain important conditions must take place before a meme coin enjoys a parabolic rise, said Co-Chairman of the Singapore Blockchain Association Chia Hock Lai.

A meme coin’s success first requires a bull market, shares Chia. Secondly, it requires positive reviews and backing from influencers, such as Elon Musks’s public support of Dogecoin.

As always, caveat emptor, panelists caution.

“These two elements will give rise to a parabolic price rise for meme coins,” says Chia, “But different countries will have different subcultures and it’s very unlikely meme coins will be the rage this year.”

Astronomical price rises of this nature have also been observed on Wall Street, but meme coins fall under speculative assets and most are useless with no specific goals in place.

Click here to download the Global Crypto Industry Overview and Trends: 2021–2022 report.

Blockchain in 2022 and beyond: Is the current crypto tumble a mirror of 2018?

Flora Li is Director, Huobi Research Institute. Huobi Blockchain Application Research Institute (referred to as “Huobi Research Institute”) was established in April 2016. Since March 2018, it has been committed to comprehensively expanding the research and exploration of various fields of blockchain. As the research object, the research goal is to accelerate the research and development of blockchain technology, promote the application of the blockchain industry, and promote the ecological optimization of the blockchain industry.

The main research content includes industry trends, technology paths, application innovations in the blockchain field, model exploration, etc. Based on the principles of public welfare, rigor, and innovation, Huobi Research Institute will carry out extensive and in-depth cooperation with governments, enterprises, universities, and other institutions through various forms to build a research platform covering the complete industrial chain of the blockchain. Industry professionals provide a solid theoretical basis and trend judgments to promote the healthy and sustainable development of the entire blockchain industry.

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