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In the popular tradition of sticking it to the man, meme coins have emerged as the ultimate one finger salute. Meme coins are seen by retail buyers as a way to invest in something outside the normal accepted traditional finance and even established crypto worlds. They are an opportunity to support something that could put them on the ground floor of a big project – even though the vast majority of meme coins dwindle to nothing.
Beloved by self-named degens (originally degenerates), meme coins have grown in popularity since the appearance of the grandfather of meme coins, Dogecoin (DOGE) in 2013. Dogecoin is to the memecoin space what Bitcoin is to cryptocurrency.
Dogecoin was created as a fun alternative to Bitcoin, featuring the Shiba Inu dog from the popular “Doge” meme as its logo. But do not be fooled, a dedicated following, real value and an enduring community keeps this OG of meme coins very much alive.
According to DEX aggregator data, every day between 40,000 and 50,000 new crypto tokens are created; this can reach 100,000 during periods of intense viral hype. Solana leads with 17 to 20 thousand new tokens a day.
What drives the meme coin boom?
Popular opinion suggests that meme coins are just parts of a colorful blockchain-based casino, with retail investors choosing interesting coins like lottery tickets, knowing that although the chance of going 100x your investment is small. They are also a bet on future attention. When you choose between coins like $WIF or $POPCAT, you are basically trying to guess which viral meme can get the most eyes on it and provide the biggest gains.
Meme coin projects can emerge from many sources – a picture, a joke, or often an animal. Despite their fun origins, meme coins are actually digital assets and can be worth a lot of money, with an emphasis on ‘can be’. They are firmly based in internet culture and humour, naturally in the world of cryptocurrency, and as a result the memes are mostly cartoons.
Memes are also often a parody or a joke and include recent high profile examples dedicated to Trump or Harris, or more radically to the popular Hawk Tuah girl who has had more than her fair share of five minutes of fame. Her success follows the axiom that most successful memes begin as viral episodes on the internet, but you have to act fast to capture the zeitgeist.
Since 2013, thousands of meme coins have been launched. These range from the popular Shiba Inu (SHIB) coin to more obscure examples like $WIF and $POPCAT. In the fast moving world of Degens in Web3, these memes have become a cultural phenomenon – and some have made some traders very rich indeed.
But according to Gotbit, a hedge fund and market maker, the role of the consumer and their desire for a nearly infinite range of choices plays strongly into their continued proliferation.
“In my opinion, you have an advantage in launching a meme coinif you are a star or a known brand, who can give their coins a lift in terms of attention. Degens love buying narratives that have some sort of backing behind them. But the most successful coins aren’t CelebFi or PolitiFi projects – people like to see innovative ideas from regular degens just like the buyer,” said Gotbit CEO and Founder Alex Andryunin. “But they are the most volatile of a high-risk class of assets, so only spend what you can afford to lose.”
Attention-Based Economy
The meme coin space is bursting with new projects and innovation as so many project founders are looking for any way to grab hold of the “meta” – a term meme coins and degens use to describe the collective consciousness that determines what is “hot” right now – and since any amount of notoriety tends to propel a project forward, sub-genres like PolitiFi (Political Meme coins) and CelebFi (Celebrity-Driven Meme coins) have evolved.
Projects like MOTHER, founded and supported by singer and celebrity Iggy Azalea, and the many Trump-based tokens such as DJT, have become popular in recent months.
TrumpCoin (DJT) was launched in June 2024 amid vague claims over its connection to the former U.S. President. It reached a market cap (MCAP) of $55 million and less than two months later dropped to just $3 million, losing 92% of its value in a matter of minutes. The drop was driven by a sell off of $2 million in tokens, causing a 92% plummet.
Gotbit Hedge Fund, proving to be on the right side of meme history, has helped over 500 meme coins reach a successful launch, including some notable successes such as Bonk, Myro, MUMU, and Ponke.
Interestingly, the currency (pun intended) of the meme coin is attention, and in particular future attention. As an example of CelebFi, the Hawk Tuah girl, combined virality and humour to grab the attention in her 15 minutes of fame. The Hawk Tuah coin was launched on June 21st going from zero to hero in just 24 hours, hitting $0.03 before settling at $0.007. However, as of today it has slipped further to $0.001817 with a 24-hour trading volume of $949109.68.
In reality for this meme coin to bounce back it probably needs more attention. Hailey – the Hawk Tuah girl – was recently interviewed and explains she has a full management team, social media accounts and millions of followers. She also launched a full merchandise line, and is accepting bookings for paid appearances. She wants to use her fame for good too – so there is certainly no lack of effort which may continue to prop up the coin. It really is a question of ‘watch this space.’
Creating Long-Term Value
For every successful meme coin, there are hundreds of disasters which just make this space so interesting. Remember the virally popular Netflix Squid Game series from Korea. Some bright spark launched Squid Game Token in October 2021. All started all well, frenetically well, with the coin reaching a shocking price of more than $2,800.
Sadly for the excited Squiders (ok, I made that name up) the developers executed a rug pull and disappeared with millions of dollars in investor funds. The token plummeted to near zero as a result.
You might wonder why degens bother given the number of rug pulls with meme coins but going back to the original point – it’s about sticking it to the man – combined with the elasticity of price. It’s akin to visiting a casino, no one really thinks they can beat the system but they still try. And it’s fun.
Another reason for the popularity of meme coins is where the chattering classes are found online. X and Telegram are the preferred platforms of choice. These platforms are easy to access, everyone has a presence, and it’s fast to follow. Unlike traditional stock trading which often requires expensive trading equipment, these platforms are free. It’s like having a casino on your mobile device, and is just a little bit addictive. As a result, meme coins may very well serve as a major vector for broader cryptocurrency adoption. Compared to more complex areas of crypto, such as decentralized finance (DeFi), meme coins are easier for the average person to understand and engage with. Their fun and shareable nature makes them more appealing to a wider audience, particularly those who are new to the world of digital assets.
Moreover, the potential for massive, overnight gains adds to their allure, offering a level of excitement that is often lacking in other areas of crypto. There are many ways to get involved but I would proffer one piece of advice – if you do decide to play with memes, then only invest disposable income, and then take profits early and often – if any profits appear.
The Long-Term Value is in the Community
The chaotic power of memes comes from the variety of coins that are available. Investors in meme coins are often seen as day-trading degens who are looking for a quick profit, but many investors are looking for long-term community involvement on X and Telegram.
Justin Roberti is the doxed co-founder of a meme coin on Base for builders and entrepreneurs called Lambow. He describes the experience as “a long-term commitment to create something with lasting value, something truly big.”
He says, “This is not financial advice, but I definitely think if you are looking for a long-term involvement with a community, you start by finding a project you can get invested in. Look for a team you trust and like – if you are part of the founder’s community, you will have the pleasure and reward of watching something grow from the beginning.”
“It drives TradFi and serious digital asset investors crazy that the meme coin phenomenon keeps happening. Serious digital finance pundits love to write off the meme phenomenon as though it is an aberration, or just a form of addicted gambling. They don’t understand the creative and self-expression aspect because you can’t see it on a spreadsheet.”
Currently, people are responding to the fact that do-it-yourself token minting platforms have made it easy to get into the meme coin business. For example, makenow.meme claimed that they helped launch 4,229 projects within 3 days of their launch on July 31.
“While earnings are definitely the main driver behind memecoins, not all participants are trading memecoins because of potential gains. Since memecoins appeared, many communities have formed groups of true supporters and believers. Those people start to form networsk of their own and with time they start to value that network more than their coin worth,” Andryunin said.
Gotbit has signed with 500 new meme coin clients since December 2023, making it the de facto leader in market making for meme coins. Gotbit also runs the biggest meme coin spaces on twitter, with audiences between 150,000 to 300,000 tuning in every week.
Conclusion
As a phenomenon, meme coins exist because of the will of the buyer who wants more choices and the opportunity to get on the ground floor of something that could “go parabolic.”
There are seemingly infinite variations of memecoins to suit every taste and interest. If meme coins are building on the success of NFT communities of 2020-2022, then we may see a more accurate view of the value of a project in their active supporters than in their MCAP.
But as long as there is a “meme coin for everyone” then they will continue to outdo their DeFi contemporaries, in terms of marketing, outreach, and strength of relationship with their supporters. Degens are making 2024 the year of memecoins through belief – the belief of degens in their meme communities, and the belief of memecoins in their communities.