Back in 1984, a U.K. television advertisement for Kit Kat chocolate bars was set in a music label\u2019s 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:<\/strong><\/p>\n \u201cYou can\u2019t sing, you can\u2019t play, you look awful\u2026 you\u2019ll go far.\u201d<\/strong><\/p>\n This is as close as I can get to explaining the appeal of memecoins to sensible, smart and intelligent people. But don\u2019t be fooled: Smart people are making a lot of money out of dumb memecoins \u2014 invariably at the expense of not-so-smart people without good timing.<\/p>\n 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 \u201csmart\u201d approach to making money by trading memecoins?<\/p>\n On Yavin, co-founder and head of business at Syndika, comes in with a hard \u201cno\u201d to that idea.<\/p>\n \u201cAnyone who says they have any trading strategies with memecoins is talking absolute BS,\u201d he says, adding the only reason memecoins have experienced a rush of interest this year is because of the bear market and crypto winter.<\/p>\n \u201cPeople 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\u2019re all about flipping and all about making a quick buck. That\u2019s the reason,\u201d says Yavin.\u00a0<\/p>\n But no lesser figure than Ethereum co-founder Vitalik Buterin \u2014 possibly the smartest person in the entire industry \u2014 turned a $25,000 investment into the original memecoin Dogecoin into many millions. He told podcaster Lex Friedman in 2021 that he\u2019d sold $4.3 million of DOGE during 2020\u2019s lockdowns and reports at the time suggested his remaining stack of Dogecoin was worth $20 million.<\/p>\n \u201cThat was one of the best investments I have ever made,\u201d 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.<\/p>\n Tom Mitchelhill is a financial journalist who worked for various cryptocurrency publications and now writes for Cointelegraph \u2014 so, he\u2019s definitely on the smarter and better-informed end of the spectrum.\u00a0<\/p>\n He tells Magazine he finds memecoins fascinating. Mitchelhill discovered them early on in his crypto writing career and has been engaged ever since.<\/p>\n \u201cMy interest is financial \u2013 this is a for-profit play \u2013 but it\u2019s also fun,\u201d he says.<\/p>\n \u201cThey can be dumb, but there is something about memecoins that is also culturally significant. Why else would a huge number of people get involved?\u201d<\/p>\n Evgen Verzun, director of Kaizen.Finance \u2014 a secure blockchain platform for token launches \u2014 is a big fan of memecoins and understands the need to try and jump on what you think the next one might be.\u00a0<\/p>\n \u201cLet\u2019s say you have \u2018missed the hype train\u2019 of Dogecoin but you still want to become a crypto millionaire. What do you do? You are looking for something similar that hasn\u2019t \u2018left the station yet,\u2019\u201d says Verzun.<\/p>\n 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\u2019s \u201ctotally useless,\u201d which strangely seems part of the appeal.<\/p>\n Mitchelhill, for one, likes PEPE:<\/p>\n \u201cWhen it comes to the most recent king of memecoins, PEPE, the founders categorically say there is no utility, and that makes me laugh,\u201d he says. <\/p>\n 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.<\/p>\n While the people who bought at the very top probably haven\u2019t made a wise investment, plenty of smart people make money on the way up and get out before it plunges.<\/p>\n 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.<\/p>\n Read also<\/p>\n Columns<\/span><\/p>\n Socios boss\u2019 goal? To knock crypto out of the park<\/p>\n<\/p><\/div>\n Features<\/span><\/p>\n Building community resilience to crises through mutual aid and Web3<\/p>\n<\/p><\/div>\n<\/div>\n<\/div>\n With PEPE, once Mitchelhill had reached a 500% profit, he took his money out. This is typically how smart investors operate \u2014 some gain, some risk, some returns. Having a clearly designed plan for when to take profits is a smart move. The vast majority of people hang on to their investments in the hope that:<\/p>\n a) They will go up further, or <\/p>\n b) They will get back to their peak price.\u00a0<\/p>\n Sara Jane Kenny,\u00a0Algorand ambassador and founder of OffChain Ireland, is another investor who is very clear about what she is doing and says her portfolio has increased over the bear market as a result of trading memecoins. She has traded in the likes of DOGE, PEPE, SFM and COOP.\u00a0<\/p>\n \u201cThere are pros and cons to everything, which I\u2019m excited to get into. Many memecoins at the beginning start as just speculation, then it can either grow to pump and dump or they start to build utility and a strong community around it \u2014 these [latter ones] are the types of ones I go for.\u201d<\/p>\n<\/blockquote>\n Her three-point plan to make money while trading memecoins, in particular, is research, patience and efficiency.<\/p>\n Kenny uses the example of COOP where she researched the origin of the token, the team, the community and what progress was happening. After selecting a promising token, she then considers the most efficient way to trade, what fees might be included, transaction speeds and the different prices across different DEXs and CEXs.<\/p>\n She then advocates watching the market and learning the patterns for a time to see when the support comes in, and when the \u201csells\u201d start happening.\u00a0<\/p>\n \u201cBuy low, sell high \u2014 it\u2019s easy on paper, but it takes a lot of time to get it right, so practice and keep notes, as the markets can be volatile. Remember to take profits, and only invest what you can afford to lose. You don\u2019t have to sell everything at once: dollar-cost average in, and out, to gain the maximum effectiveness with each trade,\u201d says Kenny.<\/p>\n She reckons the best memecoins are the ones that have a strong community, are building utility, and have some sort of meaning even if it\u2019s a joke. That\u2019s why she sees potential with COOP. <\/p>\n For the uninitiated, it\u2019s an Algorand ecosystem coin based on a series of hilarious fictional videos by Cooper Daniels following an influencer\u2019s quest to travel to Bitcoin Beach. Airdropped to the community, and with Daniels keeping zero tokens to himself, it\u2019s sparked a ton of content and games related to COOP, which surged to become Algorand\u2019s fourth largest token.<\/p>\n \u201cFor the rubbish ones, you need to look out for the red flags, like the creator holding the majority amount of the token, if the team is not doxed, there is no progress being made with the token or community. Oh, and make sure the community is not just bots, too.\u201d<\/p>\n Harry Horsfall, CEO of Flight3, is bullish on memecoins. When asked why smart people buy memecoins, he points out that being early is for winners. A successful Web3 entrepreneur whose business was recently taken over by Steven Bartlett of Dragons\u2019 Den fame, he likes to dabble because of the excitement and because he feels his finger is on the pulse and he\u2019s ahead of the retail punters.<\/p>\n \u201cI think the PEPE coin is brilliant. It very clearly says on the website that it has no utility and that there is no roadmap. It\u2019s just the network effect,\u201d he says.<\/p>\n Horsfall sees people having fun with memecoins but notes there are some serious marketers pulling the levers in the background.<\/p>\n \u201cWe are investing in ideas \u2013 and yes, 99% of them are not going to work, but there is always that 1%. If you look at Dogecoin, most people bought at 0.000\u2026\u201d Here, Horsfall loses count of how many noughts, but suffice it to say that if Dogecoin ever goes to a dollar there are going to be some very happy people.<\/p>\n \u201cIt is a bit like winning the lottery. We are all on a journey, working the day job, but maybe tomorrow we will win.\u201d\u00a0<\/p>\n Read also<\/p>\n Features<\/span><\/p>\n Why are crypto fans obsessed with micronations and seasteading?<\/p>\n<\/p><\/div>\n Features<\/span><\/p>\n The Road to Bitcoin Adoption is Paved with Whole Numbers<\/p>\n<\/p><\/div>\n<\/div>\n<\/div>\n Neil Bodl, full-time degen and founder of BodlNFT, took a break from his day job to explore dollar-cost averaging on Bitcoin and Cardano, but unfortunately, his entry coincided with a bear market. But as the market bottomed out, NFTs caught his eye.<\/p>\n \u201cI\u2019ve always been fascinated by digital collectibles and pop culture. I\u2019ve been watching Dogecoin from the start, for example, but in general, for memecoins to work, they need a certain momentum and push from a community.\u201d<\/p>\n Bodl has long been aware of the Pepe The Frog meme, and watching the chatter on Twitter, he reasoned quite early on that a memecoin based on crypto\u2019s most popular meme could quickly catch alight.\u00a0<\/p>\n \u201cA meme like PEPE is faster to share than text or words,\u201d he says, tying it all back to philosophy.<\/p>\n \u201cThe psychology of all memecoins is awfully simple. People want just two things in life \u2014 bread and circuses. Memecoins satisfy those needs, providing plenty of entertainment and dough. Generally speaking. It only becomes a question of balance because, in this world, nobody can have\u00a0all\u00a0the money\u00a0and\u00a0all the fun.\u201d<\/p>\n Bodl says that sophisticated traders can use the entertainment angle to make serious money.<\/p>\n \u201cI\u2019m not ashamed to say that I\u2019m a meme enjoyer, but my stance on memecoins reflects their own philosophy: I take them as the gag they are supposed to be. Crypto snobs think that memecoins demean and undermine the reputation of crypto as a whole, but I\u2019ll say that if the industry can be undermined by a bunch of memes, it probably has much bigger problems to worry about,\u201d says Verzun.<\/p>\n Subscribe<\/p>\n The most engaging reads in blockchain. Delivered once a<\/div>\n
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Vitalik Buterin\u2019s best-ever investment was DOGE<\/strong><\/h2>\n
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![\"DOGE\"](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2023\/06\/Doge.jpg\"\/)
What should you look for in a memecoin investment<\/strong>?<\/h2>\n
![\"Evgen](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2023\/06\/Evgen-Verzun-1.jpg\"\/)
![\"PEPE](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2023\/06\/PEPE-Price-chart.png\"\/)
![\"Pepe](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2023\/06\/Pepe-the-Frog-Feels-Good-Man-image.jpg\"\/)
Three-point plan for trading memecoins<\/strong><\/h2>\n
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Being early is the same as being right <\/strong><\/h2>\n
![\"Harry](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2023\/06\/Harry-Horsfal-e1687789424247-1024x1024.jpg\"\/)
NFTs are memes, too, really<\/strong><\/h2>\n
![\"Neil](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2023\/06\/Neil-bodl-768x1024.jpg\"\/)
\n week.<\/p>\n<\/div>\n![\"Subscribe](\"https:\/\/cointelegraph.com\/magazine\/wp-content\/uploads\/2022\/10\/reading-copy.png\"\/)
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