3-point plan for success – Cointelegraph Magazine

Back in 1984, a U.K. television advertisement for Kit Kat chocolate bars was set in a music label’s office where a keen young band played their demo for a bored music executive. Afterward, they were served the famous chocolate bars and the manager said:

“You can’t sing, you can’t play, you look awful… you’ll go far.”

This is as close as I can get to explaining the appeal of memecoins to sensible, smart and intelligent people. But don’t be fooled: Smart people are making a lot of money out of dumb memecoins — invariably at the expense of not-so-smart people without good timing.

And timing is everything in memecoins, which typically have no utility for anything except having fun and making money. So, without any fundamentals to trade on, can you still take a “smart” approach to making money by trading memecoins?

On Yavin, co-founder and head of business at Syndika, comes in with a hard “no” to that idea.

“Anyone who says they have any trading strategies with memecoins is talking absolute BS,” he says, adding the only reason memecoins have experienced a rush of interest this year is because of the bear market and crypto winter.

“People need to do something with their investments, and they cannot wait until the next bull run. These people are not interested in investing in the real projects that take years to build. And they’re all about flipping and all about making a quick buck. That’s the reason,” says Yavin. 

Vitalik Buterin’s best-ever investment was DOGE

But no lesser figure than Ethereum co-founder Vitalik Buterin — possibly the smartest person in the entire industry — turned a $25,000 investment into the original memecoin Dogecoin into many millions. He told podcaster Lex Friedman in 2021 that he’d sold $4.3 million of DOGE during 2020’s lockdowns and reports at the time suggested his remaining stack of Dogecoin was worth $20 million.

“That was one of the best investments I have ever made,” he said, although he added that when he bought at $0.008, he certainly did not expect that return. He gave his profits to GiveDirectly.

Tom Mitchelhill is a financial journalist who worked for various cryptocurrency publications and now writes for Cointelegraph — so, he’s definitely on the smarter and better-informed end of the spectrum. 

He tells Magazine he finds memecoins fascinating. Mitchelhill discovered them early on in his crypto writing career and has been engaged ever since.

“My interest is financial – this is a for-profit play – but it’s also fun,” he says.

“They can be dumb, but there is something about memecoins that is also culturally significant. Why else would a huge number of people get involved?”

What should you look for in a memecoin investment?

Evgen Verzun, director of Kaizen.Finance — a secure blockchain platform for token launches — is a big fan of memecoins and understands the need to try and jump on what you think the next one might be. 

“Let’s say you have ‘missed the hype train’ of Dogecoin but you still want to become a crypto millionaire. What do you do? You are looking for something similar that hasn’t ‘left the station yet,’” says Verzun.

For 120,000 or so hopefuls this year, the train gathering speed away from the station was PEPE. Based on the popular crypto meme of Pepe The Frog (but having no relationship to creator Matt Furie), the website cautions it’s “totally useless,” which strangely seems part of the appeal.

Mitchelhill, for one, likes PEPE:

“When it comes to the most recent king of memecoins, PEPE, the founders categorically say there is no utility, and that makes me laugh,” he says.

According to CoinMarketCap, the market cap of PEPE surged to $1.5 billion in early May, but then the price plunged around 80%. Showing the massive volatility for which memecoins are known, since the first draft of this story was written, the market cap has increased by $250 million to more than $600 million.

While the people who bought at the very top probably haven’t made a wise investment, plenty of smart people make money on the way up and get out before it plunges.

Mitchelhill claims to not be much of a gambler. He tends to invest small and hopefully exit with more. He explains the real killing is made by insiders who tend to buy half an hour into the launch.