Is It Worth It to Invest in Meme Coins?
Key Points
Most meme coins are down anywhere from 35% to 65% for the year.
Over the past few years, meme coins have significantly underperformed the broader market.
The only possible reason to invest in meme coins is for extra portfolio diversification.
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It's hard to make the case for investing in any meme coin right now. Every major meme coin is down across the board, and the entire meme coin industry is drowning in a sea of red.
Dogecoin (CRYPTO: DOGE) is down 39% for the year. Shiba Inu (CRYPTO: SHIB) is down 53%. Pepe (CRYPTO: PEPE) is down 65%. Pudgy Penguins (CRYPTO: PENGU) is down 38%. Bonk (CRYPTO: BONK) is down 53%.
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That tells you all you need to know about investing in meme coins. It doesn't matter if you're investing in dog-themed meme coins, cat-themed meme coins, frog-themed meme coins, or penguin-themed meme coins, you're losing money in 2025.
Do long-term investors buy meme coins?
But, surely, you're thinking, things must get better if you simply buy and hold a popular meme coin for the long haul, right? Unfortunately, that would be an incorrect assumption. Dogecoin, for example, is down 74% from its all-time high just four years ago. Shiba Inu is down 89%.
Image source: Getty Images.
Which makes sense, if you think about it. Meme coins are meant to be short-term investments that move based purely on hype and speculation. How could they possibly be a good long-term investment?
Portfolio diversification with meme coins
That being said, there might be one reason to invest in meme coins: portfolio diversification. If you're looking for broad exposure to the entire crypto market, you should -- at least, theoretically -- hold some meme coins in your portfolio. After all, the market cap of the top five meme coins is approximately $40 billion. That's approximately 1% of the total market cap of the $3.8 trillion crypto market.
So, if you're well aware of the risks of investing in meme coins, and are just looking for a little extra fun while investing, it might be worth holding a tiny allocation (but not more than 1%) of meme coins in your portfolio. But just remember: The chances of making a profit on your meme coin investment are limited over both the short and long term.
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Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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