The meme coin darlings of yesteryear, Dogecoin (CRYPTO: DOGE) and Shiba Inu, (CRYPTO: SHIB), may well rise again in the context of a cryptocurrency bull market. But one new contender on the Solana blockchain, Dogwifhat (CRYPTO: WIF), could well steal the crown from both to become king of the meme coins this time around.
That doesn’t necessarily make it a smart investment for everyone, of course. Still, there’s reason to believe that Wif, as the coin is affectionately called by its boosters, has the momentum to soar past the value of its canine predecessors. Here’s why.
The case for Wif
As you may have guessed, the iconic mascot of Wif is a shiba inu dog with a somewhat dour expression who wears a pink knitted beanie hat.
Evaluating the squishy factors like the aesthetics of a meme is critical to identifying the best meme coin investments. Wif is a good guide for roughly what to look for; the dog is cute and inoffensive. If the pup’s appearance wasn’t capable of pulling at the heartstrings, the coin wouldn’t have enough visual appeal to drive more people to invest in it.
Nonetheless, it may surprise investors to learn that the coin already has a market cap of around $2.5 billion despite being launched only in late 2023, making it far larger than most of the companies traded on the stock market. It’s traded on many of the major centralized cryptocurrency exchanges (CEXs), as well as all of the major decentralized exchanges (DEXs).
Coinbase will soon offer perpetual futures trading for it, which may portend an explosion of other financial derivatives based on the coin, and it’s already listed on Robinhood Markets. Potential investors of all kinds can thus easily buy the coin.
Sentiment about Wif is sky high on social media, as well as among popular cryptocurrency influencers. Some of those influencers worked together with the coin’s community to raise somewhere around $700,000 to fund a marketing campaign where Wif would be presented on the Las Vegas Sphere.
Despite what investors may assume, such organized advertising efforts are not uncommon among communities of meme coin investors, though most campaigns tend to be constrained to smaller-scale activities like social media posting, charity drives, and the occasional sale of coin-branded merchandise. Easily raising the funds to advance with mass marketing implies there’s likely more upside to come, after which coin holders will have more cash to potentially voluntarily contribute to other growth initiatives.
On that note, the energetic and large Wif community is another reason to consider buying the coin.
As the project was abandoned by its developer relatively early in its lifetime, its investor community is the only thing keeping it afloat and advancing its value. And whether via constant creation or posting of new meme material, the enthusiastic army of more than 128,000 Wif holders have risen to the challenge so far. And as many of the coin’s whales (largest holders) are actively involved with shepherding everyone else’s efforts, the community is remarkably capable by (admittedly very low) meme coin standards.
Having a large base of motivated and active coin holders is a major benefit because it means that there are many people who are consistently excited about propagating the meme. A steady drip of free marketing from holders means that the project is likely to continue having a life of its own, which implies it’ll grow in value even more over time.
This one could be ripe for a long-term hold, but it isn’t without high risk
There is currently a lot of talk in cryptocurrency circles about how Wif will one day be far larger than Dogecoin or Shiba Inu coin. It’s entirely possible, and in my view likely to happen eventually as a result of the factors outlined above. The coin is up by nearly 1,600% this year, and investors’ hopes are higher than ever.
That does not necessarily make it the right investment for you, however.
Wif is a meme coin, which is to say that it’s among the most volatile and risky type of cryptocurrency investment. Cryptocurrencies are also generally very volatile and risky compared to other investments. So Wif is toward the extreme end of the risk curve.
Sharp drawdowns, potentially to the tune of 80% or more, are guaranteed at some point in this coin’s future. It could bounce back in the days or years after such a decline, as Dogecoin did, but a recovery is not guaranteed.
Do not bet the farm on this coin. There are a slew of macroeconomic risks that could sink it or otherwise make it undesirable. There is also the risk that people will get bored of it and sell, or that drama within the community or among its influential members will derail the entire project.
If your portfolio isn’t already diversified, do that before investing in Wif. If you’re not willing to hold the coin for the long run, don’t invest at all, as you’ll likely fall victim to selling during temporary volatility.
But if you can tolerate the volatility and you think you’d like to post the cute dog picture on the internet once in a while, Wif could be a great purchase, and it’s certainly one of the strongest meme coins in cryptocurrency right now.
Should you invest $1,000 in WIF right now?
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Alex Carchidi has positions in Shiba Inu, Solana, and WIF. The Motley Fool has positions in and recommends Coinbase Global and Solana. The Motley Fool has a disclosure policy.
This 1 Memecoin Could Eclipse Dogecoin and Shiba Inu. Should You Buy It? was originally published by The Motley Fool