What Are Memecoins, and Why Are They So Popular in Crypto?
In this article, we will explain what memecoins really are and explore the different reasons why they are beginning to dominate the discourse around cryptocurrencies and attract the attention of crypto enthusiasts.
Table of Contents
- What Are Memecoins?
- Why Do Memecoins Go Viral? The Psychology Behind the Hype
- Examples of Popular Memecoins
- How Do Meme Coin Creators Make Money?
- How to Trade Memecoins
- Understanding Memecoin Prices and Values
- Are Memecoins a Safe Investment?
- How Can You Check If a Memecoin Is Legit?
- To Recap
- FAQs
Even though the crypto market is known for its volatility, there is still a fun corner to it. Memecoins! Just as memes act as a collective coping mechanism, helping you laugh stress and anxiety away, memecoins somewhat alleviate the anxiety of trading cryptocurrencies.
But that is not the only reason why they are so popular.
In this article, we will explain what memecoins really are and explore the different reasons why they are beginning to dominate the discourse around cryptocurrencies and attract the attention of crypto enthusiasts.
What Are Memecoins?
Memecoins are a type of cryptocurrency inspired by internet memes, jokes, trends, or cultural references.
Unlike traditional cryptocurrencies like Bitcoin or Ethereum, which have specific use cases, memecoins often have little to no practical utility.
Instead, their value comes from their viral appeal and community support.
One of the first and most famous memecoins is Dogecoin, which was created in 2013 as a parody of Bitcoin.
The coin features the Shiba Inu dog from the popular “Doge” meme.
Despite its humourous origins, Dogecoin quickly gained a massive following and has been used for tipping and charitable donations.
Other examples include Shiba Inu (inspired by Dogecoin), PepeCoin (based on the Pepe the Frog meme), MAGA (TRUMP), Book of Meme (BOME), Wen (WEN), Dogwifhat (WIF), Solana memecoins, which have become popular on the Solana blockchain. There is also a surge in celebrity memecoins like Daddy Tate (inspired by the controversial persona of Andrew Tate), Mother Iggy (celebrating Iggy Azalea), Caitlyn Jenner (ETH), and Lilpump (inspired by the rapper Lil Pump).
Why Do Memecoins Go Viral? The Psychology Behind the Hype
Memecoins could go viral for the following reasons:
1. Community Engagement:
One of the biggest drivers behind the success of memecoins is their strong and passionate communities.
Platforms like X (Twitter), Reddit, and Discord are buzzing with groups promoting their favourite memecoins.
These communities use memes, hashtags, and viral campaigns to spread awareness.
For example, Reddit users drove Dogecoin’s rise in popularity by creating a collective buzz that spread globally.
In the case of Solana memecoins, vibrant communities on platforms like Solana Spaces have played a big role in their growing memecoin pool.
2. Celebrity Endorsements:
High-profile figures also have a massive influence on memecoin popularity.
Elon Musk, for instance, famously tweeted about Dogecoin, calling it "the people's crypto," which caused its price to surge by 59% in February 2021.
Even new memecoins, like FLOKI (inspired by Elon Musk’s pet dog), have gained traction after similar endorsements.
These celebrity shoutouts create a ripple effect, increasing memecoin value and attracting new investors.
3. Low Entry Barrier:
The affordability of memecoins makes them accessible to almost anyone.
For example, Dogecoin was once valued at less than $0.01, allowing people to buy thousands of coins for just a few dollars.
This low price point reduces the perceived risk, especially for beginners, and encourages participation in memecoin trading.
Currently, the memecoin price for many coins remains relatively low compared to mainstream cryptocurrencies like Bitcoin or Ethereum.
4. Fear of Missing Out (FOMO):FOMO is a powerful force in the crypto world.
When people see a memecoin's value skyrocketing overnight, they fear missing out on potentially life-changing profits.
For instance, the price of the TRUMP and MELANIA coins, launched just a few days ago by US President Donald Trump and his wife, Melania, soared to almost $11 billion and $1.7 billion, respectively, on Monday morning, a few hours before his inauguration.
Viral posts showcasing this increase in market value created a bandwagon effect, pulling more people into the memecoin market.
5. Humour and Relatability:
Memecoins stand out because they’re fun and easy to relate to.
Unlike traditional cryptocurrencies, they don’t take themselves too seriously.
This lighthearted approach, combined with relatable themes like dogs, memes, and internet culture, resonates particularly well with younger, tech-savvy audiences.
Coins like PepeCoin have gone viral simply because they’re entertaining, making crypto trading feel less intimidating.
Examples of Popular Memecoins
Here is a list of some well-known memecoins:
1. Dogecoin (DOGE):
Dogecoin is the original memecoin and the pioneer of the trend.
Created in 2013 as a joke by software engineers Billy Markus and Jackson Palmer, it features the Shiba Inu dog from the popular “Doge” meme.
Despite its humorous beginnings, Dogecoin quickly gained a devoted community and became widely recognised after endorsements from figures like Elon Musk.
Currently, Dogecoin has a market value of over $10 billion, making it one of the largest memecoins.
It’s often used for tipping content creators and fundraising, showcasing its utility beyond just trading.
2. Shiba Inu (SHIB):
Shiba Inu, often dubbed the “Dogecoin Killer,” was launched in 2020 by an anonymous individual named “Ryoshi” and gained rapid traction.
Like Dogecoin, it uses the Shiba Inu dog as its mascot but distinguishes itself by offering a decentralised exchange platform called ShibaSwap.
Shiba Inu has a vast token supply of one quadrillion coins, which makes its price per token extremely low, enticing small investors.
In late 2021, its value skyrocketed by over 1000%, briefly entering the top ten cryptocurrencies by market capitalisation.
3. PepeCoin (PEPE):
PepeCoin is based on the popular internet meme, Pepe the Frog.
Launched in 2023, it became a hit in the memecoin space due to its association with a widely recognised meme.
PepeCoin experienced a surge in popularity, especially among younger traders drawn to its fun and nostalgic appeal.
Despite being relatively new, its market capitalisation surpassed $500 million at its peak.
However, like most memecoins, its price remains highly volatile.
4. Bonk (BONK):
Bonk is a notable Solana memecoin that entered the scene in late 2022.
Unlike other memecoins, Bonk aims to revitalise the Solana ecosystem by introducing a community-driven token.
Bonk was launched on December 25 with an airdrop that distributed 50% of its total supply to Solana users and developers as a Christmas gift, promoting strong community engagement.
Bonk’s unique distribution strategy helped it gain significant traction, and it quickly became a favourite among Solana enthusiasts.
5. Baby Doge Coin (BabyDoge):
Baby Doge Coin, launched in 2021, is a spinoff of Dogecoin designed to appeal to fans of the original memecoin.
It markets itself as a hyper-deflationary token, meaning its supply decreases over time, which could potentially increase its value.
BabyDoge also incorporates charity initiatives, such as donations to animal shelters, making it more appealing to socially conscious investors.
Its market capitalisation has reached hundreds of millions of dollars, showing its strong community support.
6. Notcoin (NOT):
Notcoin is a fresh addition to the memecoin scene, launched in 2024 within the TON ecosystem.
Its popularity exploded due to its integration with the Telegram app, where users can mine tokens by simply clicking on an animated coin.
This “gamified” approach made Notcoin accessible, especially to crypto beginners.
Within months, it attracted over 35 million users. Listed as the 13th project on KuCoin Pre-Market in May 2024, Notcoin has quickly transitioned from being a fun in-app game to a cryptocurrency with real-world potential.
Its straightforward, engaging model highlights how memecoins can simplify blockchain adoption for new users.
7. Dogwifhat (WIF):
Launched on the Solana blockchain in November 2023, Dogwifhat is a memecoin featuring a Shiba Inu with a quirky hat.
It quickly rose to fame, reaching a market cap of $1.83 billion by early 2024. Investors flocked to it due to its low fees and high transaction speeds on Solana.
WIF saw an astonishing price growth of over 994% within a few months, peaking at $1.85 in March 2024.
Its listing on exchanges like KuCoin further boosted its popularity, making it the fifth most popular memecoin in the market.
8. Wen (WEN):
Wen stands out in the memecoin ecosystem for its unique focus on community engagement.
Launched with an airdrop to over a million wallets, it gained a widespread user base immediately.
The token’s value surged by 500% shortly after its debut, reaching a market cap of nearly $200 million.
Operating within Solana, Wen introduced fractional NFT standards, increasing ownership and solidifying its place as a community-driven token.
This innovative approach reflects how memecoins can go beyond fun to offer real utility in the blockchain space.
9. Coq Inu (COQ):
Coq Inu is the first memecoin on the Avalanche C-Chain, distinguishing itself with a community-driven approach.
Its entire coin supply is fully liquid, leading to a market cap of over $218 million as of early 2024.
Boasting over 69 trillion tokens, Coq Inu appeals to investors due to Avalanche's low gas fees and fast transactions.
The project's playful nature and strong adoption show the growing trend of memecoins moving to new and efficient blockchain platforms.
10. Book of Meme (BOME):
Book of Meme is an experimental memecoin designed to preserve meme culture on the blockchain.
Launched in mid-March 2024 on Solana, it incorporates decentralised storage via Arweave and IPFS.
During its pre-sale, $BOME saw a staggering 44,000% increase in value, reaching a market cap of $618 million within a week.
By blending memes, decentralised storage, and crypto trading, BOME has positioned itself as a digital hub for meme enthusiasts.
Its mission to immortalise memes on the blockchain showcases the potential for memecoins to merge entertainment with technological innovation.
11. MAGA (TRUMP):
The Trump MAGA memecoin represents the fusion of politics and crypto. Launched in early 2024, this coin leveraged former President Donald Trump's media presence and political brand.
MAGA surged by over 800% within its first 30 days, peaking at $11.15 in March 2024 from an initial price of $0.252.
Its market cap climbed to $461 million, with investment firms like Mechanism Capital betting on the coin's potential during election cycles.
However, its success hinges on maintaining public interest, making it a high-risk but high-reward investment.
How Do Memecoin Creators Make Money?
Memecoin creators generate revenue through the following ways:
1. Initial Coin Offerings (ICOs):
An Initial Coin Offering (ICO) is like a launch party for a new memecoin.
During the ICO, creators sell their tokens to the public at a low price, sometimes just fractions of a cent.
Creators earn money quickly from these sales, especially when the memecoin price rises as more people invest.
A famous example is Shiba Inu, which raised millions during its initial offering and turned into one of the most popular memecoins.
2. Liquidity Pools:
A liquidity pool is where users deposit tokens to enable trading on decentralised exchanges.
Memecoin pool creators often contribute their own tokens to these pools, earning a percentage of transaction fees every time someone trades their coin.
For example, creators of Solana memecoins like Samoyedcoin can earn consistent income as users swap tokens in the pool.
3. Token Burns:
Token burning is when creators destroy a portion of the total supply of a memecoin, which increases scarcity and potentially drives up the memecoin price.
As the price increases, creators holding a large reserve of tokens can sell them at higher values.
Shiba Inu famously burned trillions of tokens to boost its appeal, which helped push its memecoin value higher and generated massive profits for the early holders, including its creators.
4. Merchandising and Promotions:
Many memecoins, especially those tied to celebrities or popular figures, like Elon Musk-inspired Dogelon Mars, sell branded merchandise or collaborate with influencers.
These promotions generate additional income and attract more investors.
Some creators also offer advertising opportunities on their platforms, further monetising the coin’s popularity.
How to Trade Memecoins
Trading memecoins involves the following steps:
1. Choose a Platform:
The first step in trading memecoins is selecting a reliable crypto exchange.
Obiex has listed popular memecoins like Dogecoin, Shiba Inu and Pepe, with a user-friendly interface.
2. Fund Your Wallet:
Once you’ve chosen an exchange, deposit funds into your crypto wallet.
Obiex allows you to fund your account using fiat currencies like USDT and NGNX, or with other cryptocurrencies like Bitcoin or Ethereum.
3. Place an Order:
After funding your wallet, decide how much memecoin to buy.
On the trading platform, you’ll see options like market orders (buy at the current price) and limit orders (set a specific price).
4. Monitor Prices:
After purchasing memecoins, monitor their prices regularly.
Memecoins are highly volatile, meaning their value can skyrocket or plummet within hours.
5. Withdraw Profits:
If your memecoins increase in value, consider withdrawing your profits.
To do this, sell your memecoins on the platform and transfer the proceeds to your secure wallet.
Always remember that profit-taking is crucial since prices can drop just as quickly as they rise.
Pro Tip: Before trading, research the memecoin you’re interested in to avoid scams.
Legitimate memecoins like Dogecoin and Shiba Inu are backed by active communities, while others might lack transparency or utility.
Check memecoin pools and community forums to ensure the project is trustworthy.
Understanding Memecoin Prices and Values
Memecoin prices are highly volatile and influenced by:
1. Social Media Trends:
Viral posts on platforms like Twitter, Reddit, and TikTok can send memecoin prices soaring overnight.
As stated earlier, Dogecoin's value skyrocketed in 2021 after Elon Musk tweeted about it, earning him the nickname "The Dogefather."
Similarly, newer Solana memecoins like BONK gained popularity due to widespread social media buzz.
Memecoins thrive on attention, and a single viral meme or celebrity endorsement can turn them into a sensation.
2. Market Sentiment:
Positive or negative news can significantly affect memecoin value. If influential figures or communities speak favourably about a memecoin, its price can rise rapidly.
In the same way, negative press or warnings about scams can lead to sharp declines.
Investors often react emotionally to news, which creates a rollercoaster effect in the memecoin market.
3. Liquidity:Liquidity refers to how easily you can buy or sell a memecoin.
If a memecoin pool (a market where the coin is traded) is well-funded with lots of buyers and sellers, its price is more stable.
Low liquidity can make prices more volatile, causing sharp swings when a few people buy or sell large amounts.
4. Speculation:Many people buy memecoins hoping their value will skyrocket, allowing them to cash out quickly.
For instance, coins like Shiba Inu (SHIB) and Floki Inu have seen massive interest due to speculative hype.
However, this speculative nature means memecoin prices can collapse just as quickly when interest fades or holders sell off all at once.
Are Memecoins a Safe Investment?
Investing in memecoins could be risky because of the following factors:
1. Volatility: Unpredictable Price Swings
Memecoins are notoriously volatile.
Their prices can skyrocket overnight based on social media trends or celebrity mentions but can also crash just as quickly.
This volatility means you could make massive gains—or suffer huge losses—in a short time.
2. Lack of Utility: No Real-World Use
Most memecoins don’t have a specific purpose or utility beyond being traded.
Unlike cryptocurrencies like Bitcoin or Ethereum, which can be used for payments or running applications, many memecoins are purely speculative.
This lack of fundamental value makes their long-term survival questionable and their prices highly dependent on hype rather than substance.
3. Scams:
The memecoin space is filled with scams and “rug pulls,” where creators promote a new coin, inflate its price, and then disappear with investors’ money.
For example, the Squid Game Token, which gained attention in 2021, turned out to be a scam, with its creators vanishing after its price surged by 33,600%.
To avoid falling victim to such fraud, always research thoroughly, check the project’s whitepaper, and verify its credibility.
Balancing Risk and Reward
While memecoins can be fun and potentially profitable, they should be approached with caution.
If you choose to invest, do so with money you can afford to lose and avoid putting your entire savings into them.
A safer strategy might involve diversifying your investments across more stable assets like Bitcoin or Solana memecoins with a stronger foundation.
How Can You Check If a Memecoin Is Legit?
To verify a memecoin’s legitimacy:
1. Research the Team:
Legitimate memecoins often have transparent creators who share their backgrounds, credentials, and goals for the project.
Look for public information about the founders and developers, such as their professional profiles on LinkedIn or Twitter.
If you can’t find any information about the team or the people involved seem fake, it’s a red flag.
2. Check the Whitepaper:A detailed and clear whitepaper is a symbol of a legitimate cryptocurrency project, including memecoins.
The whitepaper should outline the project's purpose, technical details, and roadmap.
While not all memecoins are deeply technical, their whitepapers should at least explain how the token works and its value proposition.
If the whitepaper is missing or looks like a copy-paste job filled with vague promises, approach with caution.
3. Verify Community Support:An active and engaged community is a positive sign of a memecoin's legitimacy.
Check platforms like Discord, Telegram, or Reddit to see if there’s a supportive and enthusiastic group of users discussing the coin.
Genuine discussions and interactions are key indicators of a healthy community.
4. Review Listings on Reputable Exchanges:If a memecoin is available on a well-known exchange like Obiex, it has likely passed some basic checks for security and authenticity.
However, keep in mind that newer memecoins, especially those on networks like Solana (popular for Solana memecoins), may initially launch on smaller platforms or decentralised exchanges.
Always cross-check any claims about exchange listings to ensure they’re accurate.
5. Use Audit Tools:These tools can help identify vulnerabilities in the memecoin’s smart contract and flag potential issues.
If a memecoin pool is found to have hidden clauses allowing its creators to manipulate the memecoin price or drain liquidity, that’s a clear warning sign.
Always review audit reports and look for projects with a clean bill of health.
To Recap
- Memecoins are cryptocurrencies inspired by internet memes, jokes, and cultural trends, often lacking practical utility but thriving on viral appeal and community support.
- Notable examples include Dogecoin, Shiba Inu, PepeCoin, and Solana-based Bonk, with varying levels of market capitalisation and popularity.
- Memecoins gain traction through strong community engagement, celebrity endorsements, low entry costs, FOMO (fear of missing out), and their humourous, relatable nature.
- Creators make money through Initial Coin Offerings (ICOs), liquidity pools, token burns, merchandising, and promotional efforts.
- Trading memecoins involves selecting a platform, funding a wallet, placing orders, monitoring prices, and withdrawing profits when values increase.
- Memecoin prices are highly volatile, influenced by social media trends, market sentiment, liquidity, and emotional investor reactions.
- While memecoins offer opportunities for significant gains, their speculative nature and lack of inherent value make them a high-risk investment.
- To avoid scams, prospective traders should research memecoin projects, check community activity, and evaluate transparency before investing.
FAQs
Q1. What does a meme coin do?
Memecoins are mostly used for entertainment, tipping, or speculative trading.
Q2. How much is 1 memecoin in dollars?
Prices vary depending on the coin. For example, Dogecoin is worth a few cents as of today.
Q3. What is the most popular memecoin?
Dogecoin remains the most famous memecoin.
Q4. Can a meme coin reach $1?
While unlikely for most, some coins like Dogecoin have come close.
Q5. Is it safe to invest in meme coins?
Memecoins are highly risky and require careful research.
Q6. How do meme coin creators make money?
They earn through ICOs, transaction fees, and token burns.
Q7. What are some examples of memecoins?
Dogecoin, Shiba Inu, Bonk, PepeCoin, and Baby Doge Coin.
Q8. How can you check if a memecoin is legit?
Research the team, whitepaper, and community support.
Q9. Is trading meme coins illegal?
It’s legal in most countries but subject to local regulations.
Q10. Why do memecoins go viral?
Strong community backing and social media trends fuel their popularity.
Disclaimer: This article was written to provide guidance and understanding. It is not an exhaustive article and should not be taken as financial advice. Obiex will not be held liable for your investment decisions.
