Meme Coins: How Long Should You Hold Them?

Beginners dabbling in the world of meme coins may already be familiar with their meteoric rise from obscure internet jokes to multi-billion dollar market caps.

They may also be familiar with the extreme volatility, unpredictability, and uncertainty associated with meme coins due to their short-term trend-based nature.

What some beginners might be less knowledgeable about is - “How long should I hold on to a meme coin after buying it?”

In this guide, we’ll try to find an answer to this nuanced question, and more . . .

Why Do Meme Coins Gain Value?

To understand more about meme coin longevity, we first need a basic understanding of why meme coins experience dramatic price increases.

To start with, meme coins and traditional cryptocurrencies are fundamentally different.

Meme coins are a class of cryptocurrency that is driven by media attention, viral trends, and social media hype, as opposed to having underlying technological merit or practical utility. Rather than innovate, they fascinate. Rather than providing solutions, they provide excitement. 

Now that we know what makes a meme coin tick, it’s clear that social media and online communities have key roles to play in price dynamics. Influencers, known in this space as KOLs (key opinion leaders), can trigger massive price surges (and dumps) simply by endorsing or talking about a meme coin.

When a celebrity talks about a meme coin (e.g. Elon Musk and #DOGE), or a TikTok video goes viral (e.g. Moo Deng and $MOODENG), prices can pump.

While Twitter is the home of this social activity, Reddit, Twitter, and Discord are also echo chambers for meme coin hype, with news travelling fast when the scent of opportunity is in the air. 

Returning to the point about a lack of innovation or utility - it’s not always the case. Some meme coins have utility and offer technological innovation, but they are the small minority.

The point of meme coins is not to change the world, but to have purely speculative investment instruments without substantive technological foundations. There are few smart contracts, blockchain developers, or real-world applications to be found, in >99% of cases. 

Meme coins rely on the "greater fool” theory, where investors simply aim to sell to someone else at a higher price before the inevitable crash.

This might be the most challenging concept for outsiders to understand - there is a collective agreement and understanding that most coins will eventually crash.

When it comes to meme coins, high-risk equates to high-reward, and value can evaporate as quickly as it originated, purely down to the whims and fancies of the internet collective. 

TLDR; Why do meme coins gain value?

Because meme coin investors make high-risk bets based on social media momentum and excitement, as opposed to intrinsic economic or technological value.

“Should I Buy Meme Coins?”

Here’s everything you need to consider and every thought process you should go through before buying your first meme coins.

High-Risk, High-Reward

Meme coins are one of the most volatile investment opportunities in the world, not just in the  cryptosphere. Astronomical returns are possible, with same-day thousand percent gains not unheard of, while they are equally capable of losing all value in just hours.

The risk of huge reward and total loss is what makes meme coin trading comparable to gambling.

Hype Driven by Social Trends

Meme coin value and social media buzz are inherently linked, which sets them apart as an investment class unlike most others.

Whereas most investments are backed by fundamentals, meme coin prices are based on virality, celebrity involvement, and online excitement.

Consider the impact of tweets, hashtags, rumors, and TikToks as the meme coin equivalent to microeconomics. 

Entertainment Value Over Investment Strategy

If meme coins are more about moments in online culture than serious financial planning, then you should consider the role of entertainment in this space.

It’s apt to see meme coins as a kind of digital lottery fused with community involvement.

Meme coin trading is a speculative experience, fun when you’re up, painful when you’re down. Rather than seeing this as a serious long-term investment strategy, it’s better to see meme coin trading as an entertaining trend in the current market cycle.

There are no guarantees that it will continue to be popular moving forward. 

Psychological Challenges and Emotional Control

Investing in meme coins requires emotional discipline, as powerful psychological responses come into play with each rapid price movement. 

Here are some commonplace emotional responses to be aware of:

• Fear of Missing Out (FOMO) - often leads to impulse buying at peak prices

  
  

• Panic Selling - making hasty sales during sudden price drops

  
  

• Emotional Attachment - getting too caught up in a coin or meme’s origin story and holding too long

  
  

• Impulsivity - having difficulty maintaining your logic or strategy amid online hype and acting rashly

  
  

If you think you can avoid the above and practice the core ideals below, perhaps yes, you should start trading meme coins:

• Set strict investment limits

  
  

• Have a clear exit strategy

  
  

• Never invest more than you can afford to lose

  
  

• Maintain emotional detachment from price movements

  
  

If you plan for meme coin trading to be your sole cryptocurrency investment strategy, you are in for a wild ride.

More experienced individuals in this space will allocate just a small percentage, perhaps less than 10% of their entire portfolio, to meme coins.

They’ll also be prepared to walk away and accept losses without becoming upset. 

“How Long Should I Hold Meme Coins?”

Meme coins are short-lived, rapid investments, where success depends on precise entry and exit points before the hype and excitement has dissolved.

This is going to vary drastically for every meme coin, and will require you to pay close attention to their quick price movements, social media activity, community sentiment, influencer involvement, and more.

TLDR; You should be holding meme coins for as long as you believe they are going up, and as soon as you think interest is dropping - it may be time to sell. 

Risks of Holding Meme Coins

With extreme price volatility and zero fundamental value, holding meme coins is inherently risky. This risk, however, is multiplied by additional external factors, such as scams, hacks, and pump-and-dump schemes. 

With no real-world utility to back the coin’s value, people rely on speculative hype, which can be manipulated by those with the most to gain or lose in mischievous ways.

From the moment you purchase a meme coin, expect the unexpected. 

How To Stay Safe as a Meme Coin Trader

As a meme coin investor, you must practice personal discipline, strategic thinking, and emotional detachment. Make small investments, stay well informed, and be prepared to exit quickly.

Finally, make use of the data and tools at your disposal, such as BONKbot's Trailing Stop Loss, to protect your investments.

Remember, success requires vigilance, attentiveness, and an understanding that all unrealized gains can evaporate in an instant.

If you keep these things in mind, you can do well in this space, mitigate the risks of meme coins, and find enjoyment in trading.