By 2024, the cryptocurrency market has developed a full-fledged sector of meme coins. These assets are characterized by high volatility, meaning that investments in them carry both the potential for significant returns and equally high risks.
According to Google Trends, as of this writing, user interest in meme tokens fluctuates between 26 and 73 points. The editorial team at Incrypted has delved into the phenomenon of this asset class and assessed their potential.
What Are Meme Coins and Why Are They Popular?
Meme tokens are digital assets that blend pop culture with investment tools. These instruments are often created as a joke or reflect audience reactions to specific events. Meme coins exhibit strong volatility compared to major cryptocurrencies like Bitcoin or Ethereum.
Generally, meme tokens lack technical value. However, this does not prevent their market capitalizations from reaching billions of dollars.
For example, Dogecoin (DOGE) and Shiba Inu (SHIB) rank among the top 20 largest cryptocurrencies. At the time of writing, their market capitalizations are estimated at $17 billion and $10 billion, respectively, according to CoinMarketCap.
Despite the risks associated with investing in such projects, some users manage to reap enormous profits from these investments.
In this context, analysts from Messari have highlighted the potential of these assets. According to experts, meme coins have become an important part of the market and contribute to attracting users to the cryptocurrency industry through their cultural significance.
Meme tokens can serve various purposes, including:
- Creating ecosystems around popular themes or memes
- Supporting charitable initiatives
- Paying for unique products or services
- Promoting personal brands or companies
- Serving as in-game currency
How to Start Investing in Meme Coins
Important: Any investment in cryptocurrencies carries high risks due to the volatility of assets. Therefore, it is advisable to invest only what a user is willing to lose.
As mentioned earlier, meme tokens typically lack inherent value at the launch stage, and they cannot be classified as products or services. Thus, they are ideal grounds for manipulation and speculation by both users and developers.
According to CoinGecko, meme tokens exhibited the highest returns in the first quarter of 2024. Analysts estimate that among the largest meme coins, prices have risen by more than 1312% on average.
How to Buy Meme Coins
Meme coins can be purchased in several ways:
- Through centralized platforms such as Binance or OKX
- Using DEX (decentralized exchanges) like Uniswap
When investing in meme tokens through cryptocurrency exchanges, users rely on the platforms’ reputations, which typically offers greater protection against fraudulent schemes. Listings on these platforms are strictly regulated—new assets do not appear without due diligence. However, this approach can negatively impact the variety of available meme coins.
Additionally, representatives of these platforms ensure liquidity, making the conversion and withdrawal of digital assets to fiat easier. On the downside, every centralized exchange requires users to undergo registration and KYC (Know Your Customer) processes.
Buying meme tokens on a DEX allows users to maintain their anonymity and confidentiality—one simply needs to connect a cryptocurrency wallet to the platform. Decentralized exchanges offer a vast array of meme tokens.
Typically, the greatest profit can be gained by investing in these assets during presales or the early stages of trading. For example, in the first week of the public sale of the meme coin WIF, an anonymous investor purchased 8.18 million tokens for $1170. Later, they managed to sell them for $142,000.
However, users should exercise caution and thoroughly research potential projects. According to Blockaid, around 50% of presales in the Solana ecosystem turned out to be scams. This refers to projects that conducted fundraising between November 2023 and February 2024. Crypto analyst ZachXBT believes that most fraudulent cases are related to rug pull schemes.
Overview of Popular Meme Coins
Analysts from Dune have counted over 1 million new meme tokens that emerged between April 2024 and mid-May of the same year. Counting the exact number of such assets is quite challenging.
In this article, we will explore the top 7 most sought-after meme tokens in the industry.
Dogecoin (DOGE)
Dogecoin was created in December 2013 by programmers Billy Markus and Jackson Palmer, who envisioned the digital asset as a parody of cryptocurrencies like Bitcoin.
The name “Doge” was considered “very funny” by the team, and the coin’s symbol is a Shiba Inu dog named Kabosu from Japan. This animal became a star of internet memes and sadly passed away in May 2024.
Elon Musk has frequently mentioned Dogecoin on X (formerly Twitter), and the coin’s prices typically rise in response to the billionaire’s statements. Some experts believe Musk may have secretly funded the cryptocurrency’s development.
Technically, this meme coin originated as a fork of Litecoin and utilizes the Proof-of-Work consensus mechanism. A new block is created every minute, with miners receiving a reward of 10,000 DOGE for their efforts. The total supply 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 known as Ryoshi in August 2020. The project positions itself as the “Dogecoin killer.”
The team also chose the Shiba Inu image as the token’s emblem.
SHIB operates on the Ethereum blockchain and is an ERC-20 standard token. In August 2023, the team activated the mainnet for the L2 solution, Shibarium. This network employs a new consensus mechanism called Proof-of-Participation to reduce computational costs. Additionally, the developers plan to launch an algorithmic stablecoin, issue 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 the green frog Pepe from the Boy’s Club comic series. The team emphasizes that the token has no intrinsic value and is not intended for financial gain.
Since the coin operates on the Ethereum network, transaction fees are significantly higher than those of its main competitor, DOGE. To address this issue, the meme token team launched official bridges with Arbitrum and BNB Chain.
This asset ranks in the top three for market capitalization among meme tokens, and at the time of writing, its price is less than $0.01, according to CoinMarketCap.
Dogwifhat (WIF)
The meme coin Dogwifhat, based on Solana, emerged in November 2023. The project’s inspiration comes from jokes about Shiba Inu dogs. The coin’s emblem features a puppy wearing a pink hat.
The developers of Dogwifhat have not revealed their identities; however, the team has achieved significant success in attracting an audience. In March 2024, the meme token briefly surpassed PepeCoin in market capitalization, becoming the third largest asset in the segment.
In the same month, the community managed to raise approximately $703,000 in just four days to display the symbol of the WIF meme coin on a massive 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, created in 2021.
The asset operates on the Ethereum and Binance Smart Chain blockchains, according to its white paper.
The team is working on expanding the ecosystem, developing the Valhalla metaverse, the FlokiPlaces NFT marketplace, and an educational platform called University.
Bonk (BONK)
Bonk was launched in December 2022 on the Solana network. Users have integrated the meme token into DeFi, gaming, and other sectors of the ecosystem, thereby increasing the asset’s appeal and utility. A significant factor in the rise of this meme coin was the distribution of 30 million BONK tokens to owners of Solana smartphones.
It’s noteworthy that there was no presale for BONK; instead, developers distributed tokens to NFT projects, artists, DAOs, and regular users.
Brett (Based) (BRETT)
Brett (Based) is a meme coin on the second-layer network Base, launched in 2024. The emblem of this asset features a character named Brett from the Boy’s Club comic series, who is referred to as “Pepe’s best friend.”
One of the main goals of creating this meme coin is to expand the Base blockchain community. At the time of writing, BRETT is trading at $0.13, according to CoinMarketCap.
Investment and Trading Strategies for Meme Coins
Investing in meme coins is considered a high-risk activity; however, with the right approach, one can significantly increase their profits.
First and foremost, users should conduct a thorough analysis of meme tokens, study the technical documentation, and gather all available information online regarding a specific asset. Communications in official channels such as X, Reddit, Discord, and Telegram can play a crucial role.
Investors should safeguard their assets and determine an amount that, if lost, would be manageable. The next step is to set limits and diversify risks. One of the fundamental rules is to avoid investing all available funds in a single token.
An important aspect is to stay updated on news and developments. Since meme coin prices do not follow specific logic, monitoring public sentiment can help predict market changes.
Prospects of Meme Coins in the Cryptocurrency Market
There is no consensus among cryptocurrency industry representatives regarding meme tokens and their future. Eddie Lazzarin from the venture firm a16z describes this category of assets as a “risky casino” and believes that such coins cause “daily harm.”
On the other hand, Arthur Hayes, founder of the cryptocurrency exchange BitMEX, is confident that meme coins benefit the community by attracting new developers and users.
A different perspective comes from Ethereum co-founder Vitalik Buterin. He does not find meme tokens interesting but sees potential in using such assets for charitable purposes or in Play-to-Earn projects.
Considering investor sentiment and trends, representatives from MarketVector have launched the Meme Coin Index (MEMECOIN). This tool allows users to track the performance of six meme tokens.
In any case, a segment of meme coins has already formed within the industry—these assets are even being adopted by companies outside the sector. In 2022, Dogecoin became an additional payment method on Tesla’s website, but it can only be used for purchasing merchandise. Meanwhile, products can be purchased on AliExpress using FLOKI.
Conclusions
Any cryptocurrency purchase carries the risk of loss due to the high volatility of assets, and meme tokens are no exception. Such instruments are mostly created by anonymous teams, so those wishing to invest in these assets must thoroughly research the potential project to protect their funds from scammers.
It is also essential to remember the importance of diversifying risks and to invest only an amount that one can afford to lose.
Additionally, it’s worth noting that Incrypted has launched a separate Telegram channel dedicated to meme tokens.