Maybe This Crypto Could Become the First $1 Meme Coin

Just when you thought that there couldn’t possibly be another meme coin like Dogecoin (DOGE 4.85%) or Shiba Inu (SHIB 7.91%), along comes the hottest meme coin of the year: Tamadoge (TAMA -4.79%). This new meme coin just started trading at the end of September, but it has already skyrocketed in value. It was up 200% in its first week of trading. For a very brief period, it was trading near $0.20. Could it reach $1?

Keep in mind that the world has never seen a $1 meme coin. The all-time high for Dogecoin, for example, is just $0.74. It now trades for about $0.06. And Shiba Inu will be lucky if it ever trades for a penny. But there are now $1 price estimates out for Tamadoge, and for good reason: Tamadoge is not like all the other meme coins out there.

How is Tamadoge different from other meme coins?

Unlike other meme coins that have sought to leverage the original success of Dogecoin, Tamadoge has some real-world utility behind it. Tamadoge is billed as a play-to-earn metaverse game in which users breed virtual dogs in the metaverse (“Tamaverse”) and then compete for crypto prizes. It has already been compared by crypto news sites to Axie Infinity (AXS 6.98%), which burst on the scene in 2021 as a popular play-to-earn game. At its current price of $11.65, Axie Infinity is up about 7,900% since its launch, so you can see the appeal for investors.

But Tamadoge goes one step further by incorporating non-fungible tokens (NFTs). Each virtual dog that you breed in the metaverse is also an NFT, meaning that you can sell it later if you choose. The better your pet is doing in the metaverse world, the more money it will be worth. Tamadoge is a unique combination of all the biggest trends in the crypto world during the past 24 months. It blends the concept of a meme coin with NFTs, the metaverse, and play-to-earn blockchain gaming. 

The Tamadoge hype train

From the very beginning, Tamadoge has been surrounded by massive hype. During its presale, for example, Tamadoge’s developers planned to raise just $2 million from investors. But they ended up raising $19 million, and the demand seems to be insatiable.

Even though Tamadoge has been trading for only two weeks, it briefly ranked as one of the top 200 cryptos by market capitalization. It started off trading exclusively on just a single cryptocurrency exchange but now has branched out to several others, including Uniswap (UNI 12.40%), the largest decentralized exchange in the world. The easier it is for the average investor to find and buy Tamadoge, the greater the demand will be.

And here’s the thing: The creators of Tamadoge really understand how to market a crypto. Not only did they combine all the viral trends of the past two years into a single coin, they have been rolling out a steady stream of incentives and giveaways to maintain Tamadoge’s price. For example, there’s now a $100,000 giveaway going on for Tamadoge holders. To participate, you have to hold at least $100 in Tamadoge. You gain more chances to win by doing simple things like tweeting about Tamadoge on social media and (of course!) tagging Elon Musk in your tweet.

Is there a path to $1?

My big concern, of course, is that all of this hype might not be sustainable. For example, Tamadoge is now trading at about $0.035, which is almost the same price that it started trading at on Sept. 27. There has already been one massive jump from $0.03 to $0.1944, but that was not sustainable. For Tamadoge to hit $1, it would most likely need to be listed on a major crypto exchange like Coinbase (COIN -0.99%) or Binance (BNB 3.33%). That would give it a much broader investor audience and much more liquidity.

Tamadoge also needs to follow through on all its promises for play-to-earn gaming and NFTs. To reach $1, Tamadoge would also likely require even more giveaways and promotions to keep people talking about it online. If people are simply buying and then selling Tamadoge without becoming an active part of the Tamadoge ecosystem, then the chances of hitting $1 are significantly reduced because it erodes the whole notion of utility for this coin.

The new meme coin, same as the old meme coin?

If you’re a skeptic, of course, every meme coin seems like some kind of multilevel marketing business. The people who got in early during the presale are going to make all the real money, and the way they are going to do that is by convincing other people to buy the coin and then promote it. And those people in turn need to find others to buy it and then promote it, at which point earlier investors cash in. That seems to be what is happening now with Tamadoge.

So while the hype surrounding Tamadoge might be intoxicating during a long crypto winter, just be careful about not getting burned here. Invest only what you are willing to lose. And be aware that there are plenty of promoters out there who will tell you that Tamadoge is headed to the moon. If you have a few bucks to invest, it could be fun to see whether Tamadoge ever blows past the $1 mark. But just keep in mind that it could all come crashing back to earth as soon as another dog meme coin starts barking for attention.

Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Coinbase Global, Inc. and Uniswap Protocol Token. The Motley Fool has a disclosure policy.