Meme Coins Undermine Trust in Blockchain and Decentralization

Some of the Dogecoin (DOGE) and Shiba Inu (SHIB) offsprings were seeing an upsurge amidst deep broad market correction. Thus, 2030 Floki (CRYPTO: 2030FLOKI), named after Tesla CEO Elon Musk’s pet dog Floki, is up almost 495% in a matter of just one day, trading at around $0.0000000543. The coin has surged over 520% against Bitcoin (BTC) and also gained 527.5% against Ethereum (ETH). 2030 Floki describes itself as a smart AI rebase and reward token on the Binance Smart Chain (BSC) that passively awards holders Dogecoin. The coin, which touched an all-time high of $0.00000006972 earlier on Monday, noted on Twitter that more people are buying the token.

Floki is working on three flagship utility projects: the NFT gaming metaverse known as Valhalla, the NFT and merchandise marketplace known as FlokiPlaces, and the content/education platform known as Floki “Inuversity” (not a typo). Also, Floki forms a strategic partnership with the leading market maker Wintermute, it works with more than 50 of the largest exchanges and trading platforms in the world as the main provider of liquidity. These exchanges include Coinbase, Binance, Huobi, Kraken, FTX, and Bitfinex.

Among the other knockoff coins, King Shiba (KINGSHIB) has surged over 80% over the same short period to $0.03793 and Saint Inu (SAINT) has gained 63.0% during the period to $0.000007855.

Another token, MetaDoge (METADOGE), is up 32.4% over the 24-hour period to $0.0000888 and is trending in the top spot among all cryptocurrencies on CoinMarketCap. MetaDoge describes itself as a “memecoin plus utility” in the crypto sphere. The coin, which touched an all-time high of $0.00009524 on Monday, noted on Twitter that it broke a new all-time high despite the cryptocurrency market being broadly in the red.

We are used to calling these coins the jokes or meme coins. If one wants to tap into the gambling part of the blockchain, you are welcome, so to speak! However, for those unaware of these sorts of things and whose investment decisions are, just as an example, based on the technical and/or statistical analyses, these emerging coins are a real trap. Since this market is still unregulated, which is the dark side of decentralization, we all must think hard about how to raise awareness among the crypto newbies, that these coins are not quite crypto coins at all.

In order to accomplish such segregation, the global crypto community must officially label this group of altcoins (well, previously we called them contemptuously “shitcoins”, but it doesn’t make a difference) some distinctive common nickname, pointing to their “not for all” status.

According to the price-tracking website CoinMarketCap, there are over 15,000 types of cryptocurrencies as of December 2021. Bitcoin makes up more than 40% of the total crypto market cap at the time of writing this article, and Ethereum makes up more than 20%. Altcoins occupy the remaining market share (roughly 40%).

There is a way to identify the presence of a meme coin other than just by seeing some sort of reference to dogs or particular dog breeds in its name. The wonder of Fibonacci indicator – particularly, Fibonacci retracement plotting – so far worked fine on any of these coins (note the similarity of growth patterns and key use of 0.236 Fibonacci level). Although this particular study case is for Shiba and Floki coins only, most other meme coins unveil similar dynamics patterns, that have mostly to do with pure psychology – hence, the Fibonacci retracement approach should work best on all these stories.