What Are Meme Coins: The Ultimate Guide to Crypto Memes

What are meme coins? Meme coins are a parody of the cryptocurrency ecosystem, inspired by internet culture and its obsession with the viral and humorous. Unlike established cryptocurrencies like BTC $62 654 24h volatility: 3.7% Market cap: $1.24 T Vol. 24h: $31.71 B  or ETH $2 439 24h volatility: 1.8% Market cap: $293.69 B Vol. 24h: $12.85 B , they lack solid technical or economic foundations. Their value comes from capturing and expressing the essence of memes and viral online trends.

Meme coins are known for their low initial cost and highly speculative nature. Their value often skyrockets due to social media trends, endorsements from celebrities like the CEO of Tesla Inc (NYSE: TSLA) Elon Musk, and the viral buzz generated by large communities of followers.

Despite their apparent lack of fundamental use, they have attracted a significant following and demonstrated a notable impact on the growing cryptocurrency market.

To learn more about meme coins, visit our Introduction to Meme Coins guide which covers fundamentals of this unique phenomenon.

Understanding Meme Coin Basics

This type of digital currency, born from internet humor, is redefining the rules of the crypto ecosystem. But what exactly are meme coins and how do they work?

At first glance, meme coins may seem like a simple joke, as that is how this wide category of the crypto world began. DOGE $0.11 24h volatility: 3.5% Market cap: $16.20 B Vol. 24h: $612.06 M , the pioneer meme coin, was created in 2013 as a parody of Bitcoin. Yet, it moves millions of dollars in daily trading. What is the secret to its success? A mix of humor and community that heavily benefits from the viral power of social media.

A unique aspect of meme coins is their supply. While Bitcoin is capped at 21 million coins, Dogecoin has no limit. SHIB $0.0000 24h volatility: 6.1% Market cap: $10.52 B Vol. 24h: $605.23 M , another popular meme coin, has a supply of 1 quadrillion tokens. This abundance creates an illusion of accessibility, attracting mostly novice investors.

To learn how meme coins function and how they compare to traditional crypto coins, visit our Understanding Meme Coin Basics guide.

Exploring Popular Meme Coins

While thousands of meme coins exist, especially thanks to new token factories like Pump.fun on Solana and SunPump on Tron, these are the most popular meme coins of this peculiar universe:

• Dogecoin (DOGE). The grandfather of meme coins, Dogecoin, was born in 2013 as a joke. However, with celebrity endorsements like Elon Musk, it boasts a market capitalization of billions, consistently ranking among the top 10 cryptocurrencies by market cap.

You will find all the ins and outs of Dogecoin in our dedicated What is Dogecoin (DOGE)? guide.

• Shiba Inu (SHIB). Dubbed as the Dogecoin killer, Shiba Inu was launched in 2020, quickly gaining a loyal following known as the ShibArmy. Its expanding ecosystem includes a decentralized exchange and NFTs.

Explore more details in a dedicated Introduction to Shiba Inu guide.

• WIF $2.74 24h volatility: 10.0% Market cap: $2.73 B Vol. 24h: $1.20 B . Another meme coin sensation on the Solana network, Dogwifhat is based on a dog wearing a hat. This straightforward premise has resonated with investors tired of overpromising crypto projects.

Visit our What Is Dogwifhat (WIF) Meme Coin? guide for more details.

• FLOKI $0.0001 24h volatility: 4.3% Market cap: $1.33 B Vol. 24h: $205.21 M . Inspired by the dog of Elon Musk, the coin presents itself as the People’s Cryptocurrency. Beyond the joke, Floki is building an ecosystem on Ethereum and Binance Smart Chain.

In our Floki Inu: The Rise of ‘The People’s Crypto’ in the World of Meme Coins guide, you will find more details on the coin.

• PEPE $0.0000 24h volatility: 5.0% Market cap: $4.14 B Vol. 24h: $1.61 B : Based on the iconic Pepe the Frog meme, it has seen meteoric growth since its 2023 launch. Focusing on meme culture and NFTs, it has captured the imagination of the crypto community.

Learn all the ins and outs of this popular meme coin in a comprehensive What Is PEPE Memecoin? guide.

• BONK $0.0000 24h volatility: 5.4% Market cap: $1.50 B Vol. 24h: $217.12 M : The second-largest meme coin on Solana, Bonk was launched as a community giveaway to democratize this blockchain’s ecosystem.

Read more on Bonk in our dedicated Bonk meme coin guide.

• MEME $0.01 24h volatility: 7.7% Market cap: $291.72 M Vol. 24h: $68.93 M : Taking meme coins to the next level, Memeland was created by the team behind 9GAG. It’s building a Web3 ecosystem focused on creativity and memes.

Visit our What Is Memecoin (MEME)? guide for more details.

• NOT $0.0077 24h volatility: 4.6% Market cap: $790.46 M Vol. 24h: $155.14 M : Redefining the “play-to-earn” concept on Telegram, the launch of Notcoin became the biggest in crypto gaming by mid-2024.

Eager to know more? Check out our ultimate Notcoin guide.

Buying Meme Coins

Investing in meme coins can be fun and rewarding if done with caution and care. To make the process responsible and fruitful, you need to be aware of some tips.

Firstly, do a proper research. Before buying any meme coin, conduct thorough research into its origins, purpose, team, and community. Check its smart contract on Etherscan and make sure it’s audited and verified.

Secondly, always use verified platforms. When buying or selling meme coins, use reputable platforms that have high-security standards and reliable customer service. Avoid unknown or unverified websites and marketplaces.

Thirdly, use secure tools. When storing or managing your meme coins, use security tools that protect your assets from hackers or scammers. Hardware wallets are an excellent option for offline storage.

And of course, remember to invest wisely. Only invest what you can afford to lose, diversify your portfolio, set realistic goals, take profits when possible, and be prepared to face losses. Good risk management is key before stepping into the meme coin world.

Once you make up your mind about getting some meme coins, visit our dedicated Where to Buy Meme Coins guide that explores ways to do so.

Meme Coin Market Analysis

The meme coin market has evolved remarkably, going from a joke to a serious player in the world of cryptocurrencies. Its growth has been explosive. In 2017, the market hit $343 million, a staggering increase of 1,198%. By 2018, it had surpassed $1 billion. However, the real boom came in 2021, with a market cap soaring to $7.2 billion.

What drives this insatiable demand? The viral and fun nature of memes plays a key role in creating a sense of community and belonging among investors. Accessibility for retail investors, who can participate with relatively small amounts, has broadened their appeal.

Notably, price determination in this market defies traditional investment logic. Social media and viral trends have shown a massive influence, with celebrities and influencers playing a crucial role (like the so-called Elon Musk effect). Investor psychology, driven by FOMO (fear of missing out), often overrides any fundamental analysis, especially in this space where fun outweighs fundamentals.

In our dedicated Meme Coin Market Analysis guide, we provide an overview of the key dynamics driving the success and evolution of meme coins.

Risks and Challenges Associated with Meme Coins

As with any crypto or asset, there are some risks and challenges attached to meme coins. Some of them include:

• Lack of fundamentals. Meme coins typically have fewer underlying drivers compared to more traditional investments. This can make investing in them feel more like gambling than a secure investment strategy.
• Market volatility. Such coins are highly susceptible to market fluctuations, driven by factors like hype, FOMO, social media, etc. This can lead to extreme price swings.
• Scams and fraud. Meme coins can attract bad actors looking to exploit investors’ greed and naivety. Common scams include rug pulls, pump and dumps, and phishing or malware attacks.

For other meme coin risks and tips on how to mitigate them, check our Investing in Meme Coins: Risks and Challenges guide.

Bottom Line

Meme coins, initially created as jokes in the crypto world, have turned into an economic phenomenon driven by virality, along with the backing of large communities and celebrities. Once we understand what is a meme coin, we can say that, although their value is highly speculative and they lack solid fundamentals, their ability to capture digital culture and deliver quick returns has kept them on the radar of investors.

However, the lack of clear purpose and their extreme volatility pose significant risks. As with any high-risk asset, it is crucial to invest cautiously, conduct thorough research, and manage risk effectively.