In the second quarter The Nghia in the northern province of Vinh Phuc invested US$20 to buy nearly 100 Dogecoins, a cryptocurrency that has overwhelmed the Internet this year.
“I bought the coins because everyone was buying it”.
As his investment doubled after billionaire Elon Musk spoke about the coin on Twitter, Nghia bought more of it and several other similar meme coins such as Shiba Inu and Rici Elon, hoping to make a giant profit from a small investment.
“If only one of these coins increases 10-fold, the profit will exceed the investment in the rest of them,” he said.
On Facebook groups, Nghia and thousands of other Vietnamese discuss meme coins daily as they hope to make a killing though the risk of loss is commensurately high.
Meme coins are cryptocurrencies that originated from an Internet meme or have some other humorous characteristic.
Dogecoin, released in 2013 after being created as a joke by software engineers, is the original meme coin which sparked the creation of many others.
The most popular meme coin in terms of market cap, $28 billion, is the 10th biggest cryptocurrency.
Dogecoin price. Photo courtesy of CoinMarketCap
Some 260 meme coins are currently traded, according to cryptocurrency data platform CoinMarketCap.
But only a fifth have a daily trading value of over $100,000. To put that in perspective, the cryptocurrency market daily trading value is worth $131 billion.
One major feature of meme coins is their high volatility. Dogecoin, for instance, gained 1,160 percent in April-May before giving up 69 percent to fall to the current $0.2141.
Quang Tung of Hanoi said that his wallet is like a “zoo” with many ‘animal’ coins though he does not understand all of them.
“It is like playing the lottery. I can lose all or profit multiple times”.
Hoang Minh of HCMC had not intended to invest in meme coins but the fear of missing out urged him to buy a small amount.
“These coins attract people because they are popular memes on social media”.
But with high profits come high risks of losing.
Squid Game coin, which was created amid the popularity of the Netflix series with the same name, surged 1,373 percent to $523 in three hours on Nov. 1 before plummeting to $0.003399 an hour later, sending many investors into a tizzy.
Nghia and Tung have not made major profits yet since they hold a large number of coins of low value, but hope they would be mentioned by a celebrity in future.
“Before investing in any cryptocurrency, it’s important to understand what you’re investing in and the associated risks, not just the hype around it,” said Douglas Boneparth, certified financial planner and president of Bone Fide Wealth.