As cryptocurrency experiences a growth in legitimacy across the global financial market, meme coins like Shiba Inu are riding the wave of internet culture to find success.

More so than major tokens like Bitcoin, meme coins are driven by community enthusiasm. It’s not as easy as following a Bitcoin price chart to stay ahead of a meme coin investment, but here’s what you need to know if you’re interested in investing.

Cryptocurrency has experienced a growth in legitimacy across the global financial market, and meme coins like Shiba Inu are quickly gaining attention as investors search for the next best asset.

The creations of the internet age, meme coins are different from major tokens like Bitcoin. While Bitcoin is sustained by its technical properties and the complicated supply and demand dynamics, meme coins are largely driven by community enthusiasm.

It’s not as easy as following a Bitcoin price chart to stay ahead of a meme coin investment, but here’s what you need to know if you’re interested in investing in these assets.

A Volatile, Speculative Market

There are far more meme coins than traditional cryptocurrencies, and their remarkable volatility means that hundreds of these tokens decline into worthlessness soon after their launch. In fact, meme coins are often noted for their potential to scam unwary users, who take an optimistic view of an asset that the creator isn’t necessarily intending to support.

However, a few prominent meme coins have managed to remain in the public eye and investors have ensured that the complicated supply and demand dynamics of crypto are maintained. Backed by a strong community that has moved beyond the meme foundation, these tokens have reached a point where they could be considered legitimate investments.

So, what exactly causes a meme coin to reach this point and avoid the rapid downfall that befalls most of these assets?

Like traditional cryptocurrencies, meme coins are heavily impacted by market trends, as well as supply and demand dynamics. In addition to these core factors, meme coins deal with social media hype, increased speculation, and community engagement.

When Might a Meme Coin Be Safe?

The remarkable volatility of the meme coin market is generally something to avoid, but that isn’t to say meme coins are to be written off entirely. An investor is better off waiting until a meme coin has proven itself on the market.

Meme coins tend toward rapid decline shortly after launch — but if it manages to grow in value despite this volatile period, it may be more legitimate than anticipated.

The Concerns Surrounding Meme Coins

The most concerning aspect of a meme coin investment is due to the prevalence of pump-and-dump schemes. There are several reports of meme coin buyers losing their investments once insiders sell en masse, rendering the remaining tokens worthless.

“Meme coin popularity manages to thrive off the backs of many who didn’t sell fast enough,” Forbes contributor Chris Groshong wrote. “Many of these tokens are designed to benefit their creators the most, with developers and insiders secretly holding a large share of the total supply.”

It is possible that regulatory changes and government scrutiny may improve the state of the meme coin market, but it is generally best to avoid the early days of a meme coin’s lifespan. Despite their risky nature, these speculative assets continue to attract numerous investors.

A Market With Risks and Potential

A meme coin investor should carefully consider what they are putting their money into. Is the creator making a legitimate effort to support the longevity of this asset, and have they proven the viability of the coin in any occasion outside of personal statements?

There is certainly potential in the meme coin market, but safety should be an investor’s foremost priority.