On Friday, January 17, 2025, Donald Trump launched his own crypto token, and things went wild. By Sunday, January 19, $TRUMP had skyrocketed past Pepe and Shiba Inu to become the second-largest meme coin, boasting a market cap of over $13 billion. Not surprising, given Trump’s massive popularity and the fact that he’s about to be sworn in as President of the United States.
But wait a second. How on earth does a coin with a funny-looking dog or one backed by a billionaire politician rake in billions? Welcome to the world of meme coins, where internet culture and crypto collide in ways that can seem brilliant or absurd, depending on who you ask. If you’re reading this, you’re likely asking us.
Let’s break it down and help you understand the hype—and whether it’s worth your time (and money).
What Are Meme Coins?
Meme coins are a type of cryptocurrency that starts as internet jokes, memes, or social media trends. Unlike Bitcoin or Ethereum, which were created with serious tech and financial goals, meme coins often begin as fun experiments or pranks. But surprisingly, some have gained real traction in the crypto world, thanks to a strong community and social media hype.
These coins typically have a huge (or even unlimited) supply, sometimes reaching trillions or quadrillions of coins. That’s a big difference from Bitcoin, which has a hard cap of 21 million coins. Because of their massive supply, meme coins are usually priced at just a fraction of a cent, making them seem like an affordable option for everyday investors.
Meme Coins: A Brief History
The meme coin craze started in 2013 with Dogecoin. Software developers Billy Markus and Jackson Palmer combined the popular “Doge” meme featuring a Shiba Inu dog with cryptocurrency technology as a joke about Bitcoin. What started as a joke took off big time when Elon Musk gave it some support.
Dogecoin’s success spawned a bunch of copycats, and now there are thousands of meme coins. Most fade away, but some have a big market presence and community.
Notable Meme Coins
As of March 2024, there are more than 2,000 memecoin projects out there. But not all of them are worth your attention—only about 1,000 have any real trading activity. Let’s take a quick look at the top three.
Dogecoin (DOGE)
The original meme coin is still one of the most well-known. Despite starting as a joke, Dogecoin has been used for charity and is even accepted by some businesses for payments. Its price skyrocketed in 2021 due to social media hype and celebrity endorsements.
Shiba Inu (SHIB)
Launched in August 2020, SHIB called itself the “Dogecoin killer”. It gained massive popularity by building an ecosystem that includes a decentralized exchange (ShibaSwap) and NFTs. The token’s price went through the roof in 2021 and created several crypto millionaires.
Pepe (PEPE)
Launched in 2023, PEPE rode the Pepe the Frog meme. Despite having no use case beyond being a meme, it got to a substantial market cap within weeks of launch.
The Technology Behind Meme Coins
Most meme coins are built on existing blockchain platforms, mainly Ethereum. They use the ERC-20 token standard, which makes them easy to create. This is why there are thousands of meme coins – anyone with basic coding skills can create one.
The technical features of meme coins usually are:
- Smart contract functionality (for tokens built on Ethereum or similar platforms)
- High or unlimited supply
- Low individual token price
- Basic transaction functionality
Pros of Meme Coins
Now that we’ve covered what meme coins are and how they work, don’t rush off to buy $TRUMP or any other one just yet. Let’s take a moment to check out some of the benefits of jumping on this trend.
- Community. Meme coins often have strong communities united by humor and a shared goal. This social aspect creates network effects and adoption.
- Returns. Some early investors in successful meme coins have seen crazy returns. Early DOGE and SHIB investors who held through the bull run made money they never would have with traditional investments.
- Accessibility. The low token price makes meme coins appealing to new crypto investors. You can own millions of tokens for a small investment, but this can be misleading, given the huge supply.
- Learning Curve. Meme coins can be an entry point for learning about cryptocurrency markets, blockchain, and digital assets.
Cons and Risks
Like any investment, meme coins, even $TRUMP, come with their fair share of risks and challenges. Here are some key downsides to keep in mind.
- Volatility. Meme coin prices can move wildly based on social media hype, celebrity tweets, or market speculation. These moves have little to do with fundamental value.
- Pump and Dump. The meme coin space is rife with manipulation. Early investors or large holders (“whales”) can pump the price before dumping their tokens and leaving later investors with losses.
- No Utility. Most meme coins have no real-world use case or technological innovation. Their value is almost entirely based on community and speculation.
- Regulatory Risks. The lack of regulation in the meme coin space makes it easier for scammers to create fake projects. Investors have limited recourse when things go wrong.
How to Invest in Meme Coins
If you’re going to invest in meme coins, here’s what to do:
Do Your Due Diligence
- Check out the team (if they’re public)
- Read the whitepaper or documentation
- Look at the token distribution and major holders
- Check the project’s social media and community
- Verify the smart contract code (or have someone technical do it)
Risk Management
- Never invest more than you can lose
- Consider meme coins as high-risk speculation, not investment
- Diversify your crypto portfolio beyond meme coins
- Be prepared for wild price swings
The Future of Meme Coins
The meme coin phenomenon has been around for a long time and has evolved from jokes to serious market players. Most meme coins will fail, but the concept of community-driven cryptocurrencies is here to stay.
Here are some trends in the meme coin space:
- Integration with DeFi platforms. Meme coins are starting to connect with decentralized finance platforms, making them more useful and accessible.
- Practical use cases and utilities. Instead of just being for fun, meme coins are finding real-world applications, adding more value.
- Community governance. The power is shifting to the community, allowing meme coin holders to have a say in decision-making.
- Mainstream investors and institutions. Big names are taking meme coins more seriously, adding credibility to the space.
Final Thoughts
Meme coins are the intersection of internet culture, community, and cryptocurrency. They can be fun but come with big risks. You need to know the pros and cons before getting into this wild part of the crypto market. Whether you see meme coins as investment or speculation, approach them with knowledge and caution.
