How Memes Are Gaining Monetary Value
We live in such a beautifully odd time. I say this with bewilderment, because this feeling comes from the realization that memes are making people an absurd amount of money. This year alone has spawned so many large scale events that shook the stock market to its core and everyone wonders how the hell did any of this happened. To get a better understanding about the value of memes, lets reflect on the biggest money making memes and how it’s estimated value became worth millions.
GameStop/ WallStreetbets
The trend of meme investment began with GameStop and a reddit page called WallStreetBets. This all started in January 2021, when a redditor with the username of u/deepfuckingvalue posted a screenshot of his profits of 13 million dollars after investing in options and calls through GameStop stock on WallStreetsBets. This caused investors to exercise complex options trading through Robinhood and the price of the stock went up from $20 to $400 within a few days.
This caused a massive wave of losses against hedge fund groups like Citadel, because they were short selling the stock due to the likely hood that GameStop might go out of business. As hedge funds were losing millions of dollars, Robinhood intervened and restricted the purchases of GameStop shares. This led to redditors holding onto their shares and telling everyone to hold until the short sell ends and hedge funds being forced to payout every share that was shorted.
Naturally, redditors created memes of the entire ordeal and called themselves “autists”, “apes”, and “diamond hands”. The effect it had on the New York stock exchange was unheard of and caused other shares of other struggling companies such as AMC, Blackberry, and Nokia to rise and fall in a similar manner.
While the entire GameStop fiasco is a rare example of class warfare, as it pitted retail investors against multimillion dollar companies. The entire event was fueled by memes, and a strong sense of community. Despite all of the jokes, and losses, many people earned a substantial profit from it. Some of who used the money to give back to their local communities, like donating Nintendo Switches to a children’s hospital or donating money to organizations that conserve endangered animals.
For months now, GameStop stock has declined to as low as $30 per share and has risen to $200- $300 per share turning this showdown into a battle of attrition. At the time of writing this article GameStop stock is averaging around $160. Only time will tell how long the price of GameStop will continue to hover over the $160 mark.
Dogecoin
Dogecoin is a cryptocurrency that was originally formed in 2018. Dogecoin was built to be a friendly introduction to cryptocurrency and had a ‘fun and friendly’ brand image behind it. The face of Dogecoin was a Shiba Inu that became popular as the DOGE meme. It literally became a ‘meme cryptocurrency’, but how is a meme cryptocurrency becoming worth so much? At the time of writing this article, the current price of Dogecoin was worth 25 cents per coin.
Around the same time as the GameStop fiasco was shaking up Wall Street and the New York Stock Exchange. Dogecoin was worth less than a penny, and the main reason people bought it was simply because it was so cheap where an initial twenty dollar investment got you around a thousand Dogecoin. It was one of those purchases that “it’s so dumb, I have to get it.”
The entire concept of Dogecoin was meant to be a joke among your friends, but that changed when the price of Dogecoin reached the one cent mark, and investors realized that their twenty dollar investment was making them money. This started a cycle where the price and popularity of Dogecoin became connected to retail investors buying into the cryptocurrency.
This cycle continued until the price of Dogecoin reached ten cents. Those who bought in at Dogecoin when it was around a penny or less received at 900% plus return on their investment and those who invested a thousand or more into the coin have already earned millions.
Additionally, many theorize that cryptocurrency is going to become the first unified global currency, replacing the dollar’s 60% standing as Earth’s currency. Specifically, many believe that Bitcoin or arguably Ethereum is going to become that currency. However, many people on the internet ponder the possibility on whether or not a cryptocurrency based on a 2013 meme of a Shiba Inu can become Earth’s primary global currency.
This is the part of the joke where that possibility is achievable in an absurd sense, because if the price of Dogecoin becomes one dollar then the overall market cap of Dogecoin will rival Ethereum. This is primarily due to how much Dogecoin is being mined compared to other cryptocurrencies. As Dogecoin is being mined at 10,000 coins per minute, it has no limit to how many Dogecoin can exist at any given point in time.
The price of Dogecoin is determined by demand, and so far the monetary demand of Dogecoin consists of people who bought it as a joke, and those who bought it as a means of micro-tipping. However, a small handful of businesses are starting to accept Dogecoin as a form of payment and that along with well the endorsements from notable figures such as Elon Musk, and Mark Cuban has made the price of Doge skyrocket to the point where it catches mainstream media attention. In addition, the rise of the coin has caught the eyes of serious crypto investors who sees Dogecoin as the next potential Bitcoin.
The Value Of Novelty
It is without a doubt that these meme stocks, and meme crypto being worth millions of dollars is absurd. However, there is a common factor among all of them and that is how the novelty of memes are having a profound financial impact on society. This is an ongoing joke found among the two cases, where in both events it was supported by retail investors. This leads us to believe that while one’s action can have a small impact, a larger collection of actions can make a larger impact in a ridiculous manner. It also begs the question: “Why are memes worth so much?”
Meme investments typical hold no intrinsic value or practical usage other than a joke. Dogecoin has no practical use in society and while GameStop and Wallstreetbets took a valid stance against hedge funds manipulating struggling businesses. GameStop stock should not be worth what it is now, as the increase of its value was largely fueled by the novelty of get rich schemes, and an absurd sense of community filled with diamond handed apes.
Perhaps the reason why memes are gaining monetary value is because we as a society unconsciously believe that the value of a meme is worth billions of dollars. Without even realizing it, we believe that humor, novelty, and the possibility of a joke becoming an essential function of our daily lives is worth all of the money in the world.
We value humor more than any given financially sound estimate. By coincidence, everyone invests their money into a joke at the same time and that joke became financially valuable. The fact that people are able to pay off their bills and give back society and to those who helped them at their lowest is inspiring to say the least. It is completely unbelievable that people are making money by the dumbest investments possible and that in itself…is pretty amazing.
