Millionaire Investors Are Buying Meme Coins. Should You Be Too?

It's nary astonishment that millionaire investors are loading up connected Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH). After all, these 2 cryptocurrencies person been marketplace outperformers for much than a decade.

It's a spot surprising, though, that these aforesaid investors are besides adding meme coins to their portfolios. According to the latest Motley Fool research, 86% of high-net-worth cryptocurrency owners person invested successful a meme coin similar Dogecoin (CRYPTO: DOGE) oregon Shiba Inu (CRYPTO: SHIB).

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So what's going connected here, and what mightiness it mean for the mode you conception your portfolio?

One plausible mentation is that these millionaire investors are simply looking to turbo-charge the show of their portfolios. After all, the astir commonly cited crushed for investing successful crypto, according to the Motley Fool research, is the imaginable for beardown returns. By sprinkling successful meme coins present and there, it's theoretically imaginable to make stratospherically precocious returns.

But is that truly the case? Just look astatine the semipermanent show of Dogecoin, which is easy the astir fashionable cryptocurrency held by millionaires. During the fabulous bull marketplace rally of 2020-2021, Dogecoin skyrocketed successful terms from specified pennies to an all-time precocious of $0.74.

But since then, it's each been downhill for Dogecoin. It presently trades for a terms of conscionable $0.10, and adjacent efforts by billionaire Elon Musk person failed to prop up the terms of Dogecoin. If you bought Dogecoin astatine the highest of its popularity successful May 2021, past you're down 86%.

An absorbing improvement is the caller motorboat of meme coin exchange-traded funds (ETFs). There are present ETFs offering single-crypto vulnerability to Dogecoin, and determination are plentifulness of applications successful the works for different meme coin ETFs. These ETFs look and enactment overmuch similar the highly palmy Bitcoin ETFs that bash thing but clasp Bitcoin.

Arguably, determination are immoderate insignificant diversification benefits to beryllium had here. After all, the apical 5 meme coins present relationship for astir 1% of the crypto industry's full marketplace value. So if you're looking to adhd a modicum of further diversification to your portfolio, you mightiness see a meme coin to adhd into the mix.

But wouldn't it marque acold much consciousness to clasp a broadly diversified meme coin ETF that holds dozens, if not hundreds, of antithetic meme coins? That way, you wouldn't beryllium afloat leveraged to the destiny of the cute Dogecoin dog. You would besides beryllium capable to pat into the upside imaginable of cats, frogs, penguins, oregon immoderate different animal-themed meme coin is presently soaring successful value.