Who are Jeo Boden, Danold Tromp and Olen Mosk? All three misspellings of the popular names have been making headlines recently, and not because editors have gotten lazy. These joke cryptos were launched to take advantage of the fact that all three notable people are leading figures in the daily news cycle. And as InvestorPlace analyst Luke Lango notes, when it comes to meme cryptos, the potential to go viral is everything.
It may strike some as absurd that cryptos based on misspelled names are rising in value. But meme coins have ridden crypto rallies to impressive heights before, no matter how ridiculous they may seem. Crypto and stock markets always have a gambling aspect.
But in the case of meme coins, Lango believes that analogy is particularly applicable. He recently equated the current crypto rush to the 21st century version of the gambling boom that rocked Las Vegas in the 1970s, painting meme cryptos as the slot machines of modern finance.
We Don’t Need Vegas. We Have Meme Coins.
If this all sounds familiar, it’s because a similar phenomenon played out in 2021. Tokens like Dogecoin (DOGE-USD), Shiba Inu (SHIB-USD) and Floki Inu (FLOKI-USD) surged to impressive heights. This “pupcoin frenzy” became one of the year’s defining market trends, with news outlets painting their websites with a staggering amount of Shiba Inu pictures.
As Lango explains, meme coins are back — and these bizarre new cryptos have plenty of room to run. That’s even if a bet on one is nothing more than a gamble.
It is for this reason that Lango compares meme coin investing to playing the slots. He points out that, during the 1970s, many people felt the need to hit the lottery in order to get ahead in life due to difficult economic conditions. This compelled them to start gambling and make trips to Las Vegas just to take a chance on getting lucky. “Now, we don’t need Vegas because we have cryptos,” says Lango.
Decades later, Lango sees a similar reality unfolding for a new generation. Educated, young professionals are still unable to own homes despite earning multiple degrees and procuring good jobs:
“They’re seeking lottery tickets. They’re not driving out to Vegas because they have lottery tickets on their phones. [In this case], they’re called cryptos. And specifically, they’re called meme tokens, meme coins, the joke coins.”
It makes sense that tech-savvy millennial and Gen Z investors would be drawn to these cryptos, all of which fall under the umbrella term “altcoin,” as they are alternatives to Bitcoin (BTC-USD). When the Dogecoin surge of 2021 kicked off this initial craze, they instantly understood the crypto’s title, a reference to a popular internet meme that likely puzzled older generations.
Reasons for the Surge
Why are cryptos enjoying such impressive growth this year? When the fall of FTX took down the entire crypto market in November 2022, many speculated that the asset class would never recover. But a little over a year later, BTC has surged more than 140% over the past six months, reaching its highest prices yet.
This is primarily due to the fast-approaching Bitcoin halving of 2024. The event is scheduled for April 2024 and will see the rewards for Bitcoin mining reduced by 50% as well as lower the rate of production. It will significantly impact crypto prices, as supply is a key component of the Bitcoin bull thesis. When BTC rises, its peers inevitably follow.
As Lango highlights, these Bitcoin-driven booms ultimately end up lifting altcoins, too. When BTC’s dominance temporarily falls after halvings, investor focus often shifts to the less-mainstream cryptos. This means that the altcoins currently on the rise may continue their momentum as they climb what Lango describes as a “wall of worry”:
“You’re seeing a bit of front running of that right now […] But I think these meme tokens, just given the historical pattern here, the historical precedence, [are] probably in the second or third inning of what’ll end up being a multi-quarter run higher.”
Put another way, these bizarre meme cryptos will likely continue their upward trajectory. But if that’s the case, how should investors evaluate the best ones to buy before this frenzy ends?
Investing in Joke Cryptos
Lango emphasizes that picking meme coins is not at all like investing in stocks or leading cryptos like Bitcoin or Ethereum (ETH-USD). Factors such as a crypto’s leadership, fundamentals and growth potential don’t matter for meme coins. In fact, as he sees it, investors should take the opposite approach to joke cryptos and focus on tokens whose creators readily admit their projects serve no purpose other than having fun and making money.
Take one of Lango’s favorite meme cryptos, Pepe (PEPE-USD), as an example of a meme coin with upside potential. One of the reasons he likes it is that the token’s creators have acknowledged its only functionality is as a meme.
“It’s transparent, it’s honest, it’s the devil you know. [Pepe is] not pretending to be anything more than what it is. It’s an online slot machine, it’s being exactly what the people want it to be, what they use it for. That’s why I think it can work.”
Additionally, Lango acknowledges Pepe’s logo, with its eye-catching nature likely to help it go viral. “[The] frog, it’s ugly, it’s grotesque, and it’s hilarious. It’s a hilarious-looking frog, just the aesthetic of it, not talking about its attachment to anything […] It has virality potential,” Lango says. Fellow joke crypto Dogwifhat (WIF-USD), which features a photo of a Shiba Inu wearing a knitted cap, shares the same potential. “It just captures the eye when you’re scrolling.”
How Long Will This Last?
As is always the case when meme coins surge, investors should be assessing how long the hot streak can realistically continue. The crypto boom/bust cycle that Lango highlights typically begins one year before the Bitcoin halving and ends roughly one year after it. With the halving event now quickly approaching, Lango predicts that the BTC rally could continue into 2025. That means the joke crypto rally could continue over the same period as well.
It’s impossible to predict exactly when these tokens will fizzle out. But at least in the short term, it seems that they’re well-positioned to keep rising on meme momentum, especially if investors keep winning at what has become the digital slots of their generation.
On Low-Capitalization and Low-Volume Cryptocurrencies: InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
