Memepholio is already a well-known topic, but now it has actively surfaced in many communities, as investors were expecting BTC to go to $100,000 and higher. In the period of decline, it is even more important to discuss it.
What is a memefolio?
A memefolio is an investment portfolio consisting of meme coins (for example: DOGE, BONK, POPCAT, FARTCOIN, SPX and others). These assets are based on internet memes and attract attention due to hype, community and celebrity endorsement. Memefolio is a high-risk strategy focused on short-term speculation.
Differences between a memefolio and a regular portfolio
Composition: A memefolio consists of memecoins, i.e. only high-risk assets, whereas a regular portfolio contains assets with different risk levels.
Goal: a memefolio is aimed at quick profits, while a conventional portfolio is aimed at long-term and more or less sustainable growth through diversification.
Risks: a memefolio is much riskier than a balanced crypto portfolio. There are basically no assets in it that will protect you during a bear market.
Advantages of memefolio
High return potential: Meme-coins can rise dramatically in value due to hype and popularity – this is an usual view. Now that meme-coins have become a highly liquid speculative tool, if there is growth in the market, meme-coins will grow much faster than large coins and mid-sized alts.
Community and influencer support: Active communities can support the demand for meme-coins, and a few words from a major media figure can create tens of percent growth in the token (e.g. Musk – Dogecoin bundle).
Liquidity: Many large meme-coins are listed on major CEXs, traded by market makers and many speculators, they often have very high liquidity, which means low spreads, no slippage and the ability to trade large volumes.
No unlocking and inflation: In most cases, all Meme tokens are already unlocked and there is a burning of tokens (as in BONK and FARTCOIN) instead of minting new ones. And there is no pressure from early investors who get tokens after unlocking and immediately dump them (as in APE, AEVO, TIA, etc.).
Disadvantages of memefolio
Lack of fundamental value: Many meme coins have no real innovation base. There are a few meme-coins that are building their own ecosystem: SHIB, BONK and FLOKI, but in the main, meme-coin is just an empty coin, and as long as there is interest from the community and speculators, it is worth something.
Liquidity issues: Meme-coin can be difficult to sell when its popularity drops. Applies to small meme coins. If you create a portfolio of Pumpfun or Sunpump meme-coins, you will soon face this problem.
Short-term strategy: Memepholios are rarely effective in the long term. If you decide to hold such a portfolio for the long term, it is a very bad idea. It is more likely that a new strong meme coin will appear than that an old one will rebound strongly. The sect of SHIB or DOGE owners is the clearest example.
High volatility: Meme coin prices can change dramatically, which increases the risks. This is both an advantage and a disadvantage.
Memefolio’s long-term prospects
Memefolios are foolish to use for the long term. While some memecoins like Dogecoin are popular, most projects disappear after the hype dies down. For long-term investments, it is better to choose more stable cryptocurrencies with fundamental value. This idea should be well understood and avoid unnecessary illusions.
The main point of using memefolio, you forecast growth in ETH and BTC, and quite strong, and not for one day. Then you will make a much bigger profit using memefolio than holding BTC and ETH, often a bigger profit. If you are wrong and the market starts to fall, your memefolio will shrink and lose value many times faster than BTC, ETH and other major coins. Sort of like trading with shoulders, but without the shoulders.
