Meet WallStreetBets, Elon Musk, and the Crypto Meme Phenomenon

In the world of finance, you might expect terms like low-income retail investors, hedge funds, institutions, and commissions to be exclusive to Hollywood flicks like The Big Short or The Wolf of Wall Street. Surprisingly, these very terms took center stage in January 2021 with the GameStop saga, a complex event that demonstrated the power of online communities in influencing stock markets.

WallStreetBets case

GameStop, a once-popular video game retail chain, saw its stock plummet from $62.11 in 2007 to a mere $3.50 in March 2020. However, in January 2021, the stock experienced a remarkable 400% surge, peaking at $160. Behind this meteoric rise was the WallStreetBets subreddit, a forum founded by Jaime Rogozinski in 2012 for young investors to discuss high-risk trading without apology.

This unprecedented stock market frenzy was driven by the WallStreetBets community, a group of anonymous investors who share stock tips and exploit market vulnerabilities. For the first time in Wall Street history, hedge funds faced massive losses at the hands of retail investors, reigniting debates about stock market regulation and prompting brokers like Robinhood and Interactive Brokers to halt certain trades.

Say hi to Tesla, Dogecoin, and Elon Musk

The astounding GameStop surge drew thousands of new users to WallStreetBets, as retail investors took on hedge funds' buying power. The forum soon turned its attention to Dogecoin, a meme-inspired cryptocurrency that began as a parody of the Bitcoin craze in 2013. With over 869,000 people discussing the crypto-asset on social media, it's clear that this digital currency has gained traction.

Dogecoin supporter Elon Musk tweeted about WallStreetBets, contributing to trading apps like Robinhood halting GameStop transactions. Even celebrities like Kiss frontman Gene Simmons and rapper Snoop Dogg have joined the Dogecoin fan club. As of February 8, 2020, Dogecoin traded at $0.007 per coin, ranking as the world's tenth-largest cryptocurrency by market capitalization. In 2023, it is already $0.072 per coin. The unofficial goal is to push the currency to a dollar value, requiring an additional 1230% increase.

Musk's tweets have significantly influenced Dogecoin's value, though he has claimed that his comments are merely jokes. Despite his seemingly light-hearted approach, Musk's involvement has undoubtedly impacted the crypto market.

The Birth of Dogecoin

Created in 2013 by marketing consultant Jackson Palmer and programmer Billy Marcus, Dogecoin was initially designed as a satirical take on Bitcoin and the growing "crypto fever." Using the popular Doge meme as its logo, the creators never expected the digital currency to gain such traction. Within 15 days of its launch, Dogecoin's value increased by 300%.

Dogecoin has even funded social projects in countries like Kenya via crowdfunding. Its creators maintained that the currency's purpose was to emphasize the fun aspect of cryptocurrencies and to "give value to absurd things."

Crypto memes explained

Crypto memes have become an influential force in the world of digital currencies, often serving as a lighthearted entry point for newcomers to the crypto space. They are typically based on popular internet memes and often start as jokes or parodies before gaining traction and evolving into legitimate cryptocurrencies with active communities and markets. Here are some of the most popular meme coins:

1. Dogecoin (DOGE): As mentioned earlier, Dogecoin was created as a parody of Bitcoin and other cryptocurrencies in 2013. It features the Shiba Inu dog from the popular Doge meme as its mascot. Despite its humble beginnings, Dogecoin has become a widely recognized and traded cryptocurrency, thanks in part to endorsements from celebrities like Elon Musk, Snoop Dogg, and Gene Simmons.

2. Shiba Inu (SHIB): Inspired by Dogecoin's success, Shiba Inu is another meme coin featuring the Shiba Inu dog breed. Launched in August 2020, it has been dubbed the "Dogecoin Killer" and aims to rival DOGE in terms of market capitalization and popularity. Shiba Inu has its own decentralized exchange platform, ShibaSwap, which further bolsters its credibility in the crypto space.

3. SafeMoon (SAFEMOON): Launched in March 2021, SafeMoon is a DeFi token that promotes long-term holding through its unique tokenomics. While not explicitly based on a meme, SafeMoon gained popularity through social media and meme culture, with its tagline "Safely to the Moon" being a play on the popular phrase "To the Moon!" often used in crypto communities to express optimism for a coin's potential growth.

4. Baby Doge Coin (BABYDOGE): Baby Doge Coin is a spin-off of Dogecoin, featuring a cute, baby version of the Shiba Inu mascot. Launched in June 2021, this meme coin aims to capitalize on the success of its predecessor, while also offering faster transaction speeds and lower fees. Baby Doge Coin has gained traction on social media platforms, with celebrity endorsements, including a tweet from Elon Musk.

5. Floki Inu (FLOKI): Another Dogecoin-inspired meme coin, Floki Inu was launched in June 2021 after Elon Musk tweeted about naming his Shiba Inu dog "Floki." The cryptocurrency has since built a dedicated community and has embarked on various marketing efforts, including partnering with popular sports teams and influencers.

While meme coins may start as jokes or parodies, they can grow into legitimate cryptocurrencies with active communities and significant market capitalization. However, it's essential to approach these investments with caution, as the crypto market is highly volatile, and meme coins can be subject to sudden price swings and potential losses. Always conduct thorough research and consider the risks before investing in any cryptocurrency.