By 2024, a full-fledged memcoin sector will have formed on the cryptocurrency market. These assets are characterized by high volatility, therefore, investments in them are associated with high potential returns and equally high risks.
According to Google Trends , at the time of writing, user interest in meme tokens ranges between 26 and 73 points. The editors of Incrypted understood the phenomenon of this asset class and assessed their potential.
What are memcoins and why are they popular?
Meme tokens are digital assets that combine pop culture and investment tools. Such tools are created as a joke or reflect the audience’s reaction to certain events. Memcoins are characterized by high volatility compared to major cryptocurrencies like Bitcoin or Ethereum.
As a rule, meme tokens do not represent technical value. However, this does not prevent their capitalization from reaching billions of US dollars.
For example, Dogecoin (DOGE) and Shiba Inu (SHIB) are in the top 20 largest cryptocurrencies. At the time of writing, their market capitalization is estimated at $17 billion and $10 billion, respectively, according to CoinMarketCap .
Despite the risks associated with investing in such projects, some users manage to get huge profits from such investments.
Against this background, Messari analysts noted the potential of such assets. According to experts, they have become an important part of the market and contribute to attracting users to the cryptocurrency industry due to their cultural component.
The fields of application of meme tokens can also be diverse:
- creating an ecosystem around a popular topic or meme;
- support of charitable initiatives;
- payment for unique products or services;
- promotion of a personal brand or company;
- use as in-game currency.
How to start investing in memcoins?
Important: any investment in cryptocurrencies is associated with high risks due to the volatility of assets. Therefore, it is worth investing only the amount that the user is ready to lose.
As we already wrote above, usually at the launch stage, meme tokens are not valuable from the point of view of implemented technologies, they also cannot be called products or services, and therefore they are an ideal platform for manipulation and speculation by both users and developers .
According to CoinGecko, meme tokens showed the highest return in the first quarter of 2024. According to analysts’ calculations, among the largest memecoins, quotes have increased by more than 1,312% on average.
You can buy memcoins in several ways:
- through a centralized platform like Binance or OKX ;
- using DEXs (decentralized exchanges) like Uniswap.
When investing in meme tokens through crypto exchanges, the user relies on the reputation of the platforms and is more likely to be protected from fraudulent schemes. Listing on such platforms is strictly regulated — new assets do not appear there without due diligence . However, this approach does not have the best effect on the variety of available memcoins.
In addition, representatives of the platform take care of liquidity, which simplifies the process of converting and withdrawing digital assets to fiat. On the other hand, every centralized exchange requires its users to complete registration and KYC (Know Your Customer).
Buying meme tokens on DEX allows you to maintain your anonymity and privacy — you just need to connect your cryptocurrency wallet to the platform. Decentralized exchanges offer a huge number of meme tokens.
As a rule, the greatest profit can be obtained by investing in such assets during the presale or in the early stage of trading. For example, in the first week of the WIF memcoin public sale, an unknown investor purchased 8.18 million tokens for $1170. After some time, he managed to sell them for $142,000.
However, here the user should exercise special caution and carefully study the potential project. According to Blockaid, about 50% of presales in the Solana ecosystem turned out to be scams. We are talking about the projects that carried out fundraising in the period from November 2023 to February 2024. Cryptoanalyst ZachXBT believes that most fraudulent cases are related to the rug pull scheme.
Overview of popular memcoins
Dune analysts counted more than 1 million new meme tokens that appeared between April 2024 and mid-May of this year. It is quite difficult to calculate the exact number of such assets.
In this material, we will consider the top 7 most in demand in the industry.
Dogecoin (DOGE)
Dogecoin appeared in December 2013. The digital asset was created by programmers Billy Marcus and Jackson Palmer. The developers conceived the project as a parody of cryptocurrencies such as Bitcoin.
The name doge was considered by the team to be “very funny”, and the symbol of the coin was a Shiba-inu dog nicknamed Kabosu from Japan. The animal was the hero of Internet memes and died in May 2024.
Dogecoin has been repeatedly mentioned by Elon Musk on X (formerly Twitter). Quotations of the coin usually react with growth to the statements of the billionaire. Some experts believe that Musk could secretly finance the development of cryptocurrency.
Technically, memcoin appeared thanks to the fork of Litecoin and uses the Proof-of-Work consensus mechanism. It takes one minute to create a new block, the miner’s reward for this is 10,000 DOGE. The number of coins in circulation is unlimited. At the time of writing, DOGE is trading at $0.12, according to CoinMarketCap .
Shiba Inu (SHIB)
Shiba Inu was introduced by an anonymous developer named Ryoshi in August 2020. The project positions itself as a “dogecoin killer”.
The team also chose an image of a Shiba Inu as the token emblem.
SHIB is based on Ethereum and is an ERC-20 standard token. In August 2023, the team activated the Shibarium L2 solution mainnet. The network uses a new consensus mechanism called Proof-of-Participation to reduce computational costs. The developers also plan to launch an algorithmic stablecoin, release a Visa SHIB Burn card, and create an L3 solution on top of Ethereum.
At the time of writing, SHIB is trading for less than $0.001, according to CoinMarketCap .
PepeCoin (PEPE)
PepeCoin was launched in April 2023 by anonymous developers. The emblem of the meme token is Pepe the green frog from the Boy’s Club comic book series. The team emphasizes the attention of users that the token has no value and is not intended for financial gain.
Since the coin is deployed on the Ethereum network, the cost of transaction fees is significantly higher than that of its main competitor, DOGE. To solve this problem, the meme token team launched official bridges with Arbitrum and BNB Chain.
The asset is in the top 3 by market capitalization among meme tokens and is worth less than $0.01 at the time of writing, according to CoinMarketCap .
Dogwifhat (WIF)
Solana-based Dogwifhat memcoin appeared in November 2023. Jokes about the Shiba-inu dog are considered the ideological inspirations of the project. The emblem of the coin is a puppy in a pink hat.
The developers of Dogwifhat do not reveal their names. However, the team managed to achieve high results in engaging the audience. In March 2024, the meme token briefly overtook PepeCoin in terms of market capitalization, becoming the segment’s third-largest asset.
That same month, it took the community just four days to raise about $703,000 to put WIF’s memcoin token dog on the giant screen at the MSG Sphere entertainment complex in Las Vegas.
At the time of writing, WIF is trading at $2.13, according to CoinMarketCap .
Floki Inu (FLOKI)
Floki Inu is a meme token inspired by Elon Musk’s Shiba Inu dog named Floki in 2021.
The asset is deployed on the Ethereum and Binance Smart Chain blockchains, according to the white paper .
The team is working on the expansion of the ecosystem and is engaged in the development of the metauniverse Valhalla, the NFT marketplace FlokiPlaces and the educational platform University.
Bonk (BONK)
Bonk launched in December 2022 on the Solana network. Users have implemented the meme token in DeFi, gaming and other sectors of the ecosystem, thus increasing the appeal and utility of the asset. The distribution of 30 million BONK to smartphone owners from Solana also played a big role in the formation of memcoin .
It is worth noting that in the case of BONK, there was no presale, instead, the developers distributed tokens to NFT projects, artists, DAOs and ordinary users.
Brett (Based) (BRETT)
Brett (Based) is a memcoin on the second level of the Base network , which appeared in 2024. The emblem of the asset is the Boy’s Club comic book hero named Brett. The latter is called “Pepe’s best friend”.
One of the main goals of creating this memecoin is to expand the Base blockchain community. At the time of writing, BRETT is trading at $0.13, according to CoinMarketCap .
Memcoin investment and trading strategies
Investing in memcoins is considered a high-risk activity, but with the right approach, you can significantly increase your profits.
First of all, the user should conduct a thorough analysis of meme tokens, study the technical documentation and all the information on the Internet about a certain tool. Posts on the official X, Reddit, Discord and Telegram channels can play a huge role.
The investor should secure his assets and determine the amount, the loss of which will be painless. The next step is to set limits and diversify risks. One of the basic rules is not to invest all available funds in one token.
Keeping track of news and updates is an important aspect. Since memecoin quotes do not follow a specific logic, it is only observing the public mood that will help predict changes in the market.
Prospects of memcoins in the cryptocurrency market
Representatives of the crypto industry do not have a single opinion about meme tokens and their future. Eddie Lazzarin of venture capital firm a16z calls this array of assets a “risky casino” and believes that such coins are causing “daily damage.”
At the same time, the founder of the BitMEX cryptocurrency exchange, Arthur Hayes, is confident that memcoins benefit the community by attracting new developers and users.
Ethereum co-founder Vitalik Buterin expressed a different opinion. He does not consider meme tokens interesting, but he sees a perspective in using such assets for charity or in Play-to-Earn format projects.
Taking into account investor sentiment and trends, MarketVector representatives launched the Meme Coin Index (MEMECOIN) tool. With its help, you can monitor the effectiveness of six mem-tokens.
Meme Coin Index (MEMECOIN) chart. Data: MarketVector .
In any case, a segment of memcoins has already formed in the industry — assets in the category are even being implemented by companies outside the industry. In 2022, Dogecoin became an additional means of payment on the Tesla website. You can pay with this asset only when buying souvenir products. And with FLOKI you can buy goods on AliExpress.
Conclusions
Any purchase of cryptocurrencies carries the risk of losing funds due to the high volatility of assets. Meme tokens are no exception. Such tools are mostly created by anonymous teams. Therefore, those willing to invest in such assets should study the potential project in order to protect their funds from fraudsters.
It is also worth remembering about risk diversification and investing only the amount that you can afford to lose.
