The value of cryptocurrencies is influenced by various narratives that compete for dominance in the market. Memecoins and AI tokens have gained popularity recently, with Solana (SOL) emerging as a sustainable platform benefiting from the traffic. Solana’s utility is maximized as it is required to trade with memetic assets like Fartcoin (FART) and Bonk (BONK). The question arises whether investors should view some memecoins as utility tokens for long-term investment beyond short-term speculation.
The utility of memecoins like the Official Trump (TRUMP) and Hawk Tuah (HAWK) tokens lies in monetizing the following of certain personalities, providing a liquidity pool for trading. The primary utility of most memecoins is the monetized following itself, which enhances their value based on social contagion and community engagement. Memecoins like Solana (SOL) have core functionality tied to their utility, while the functionality of memecoins is driven by social media hype and community engagement.
Shiba Inu (SHIB) has emerged as a top memecoin due to its unique features and utility. With a finite supply, SHIB token holders engage in burn drives to increase scarcity, while the token is utilized in ShibaSwap decentralized exchange (DEX) and as a utility fee token. SHIB’s market activity is boosted with futures trading strategies and the token is accepted by 8 online platforms for payments. SHIB’s staying power is bolstered by its multiple layers of utility beyond dog memes.
To avoid holding worthless token bags, potential investors should look for memecoins with a large market cap and high liquidity. Low liquidity increases the risk of lower valuation and loss of traction for future drives. Memecoins divested from specific individuals, with a deep utility ecosystem, are more likely to have a longer lifespan in the market. Memecoins like Pepe (PEPE), Bonk (BONK), and Floki (FLOKI) fit these parameters and offer a low barrier to entry for investors in future cycles.
In conclusion, memecoins offer a highly speculative investment opportunity that should be approached with caution. While some memecoins like Shiba Inu (SHIB) have demonstrated robust utility and staying power, investors should be mindful of the risks associated with such assets. By conducting thorough research and understanding the narratives driving the value of cryptocurrencies, investors can make more informed decisions in the volatile crypto market.
