What Are Meme Coins?
As of July 2024, the meme coin sector has grown to $53 billion, with 10 meme coins having broken into the top 100 crypto by market cap, with 5 meme coins coming from this cycle. Deriving their value primarily from community engagement and internet culture, meme coins continue to be the best-performing niches in the first half of 2024, with several meme coins outperforming BTC despite market corrections and increased institutional interest from the BTC ETF approval.
The liquidity of meme coins has doubled since the start of the year, as measured by 1% market depth, reaching an all-time high of $128 million in early June 2024.
Unlike cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH) which are built with specific technological or financial purposes in mind, meme coins often start out as jokes on social media platforms, and tend not to have any use case beyond being used for for entertainment and speculative trading. However, the market is ever-evolving, and so are meme coins. Learn about how meme coins began, how they work, and explore the top and trending meme coins in the market in our guide.
History of Meme Coins
The concept of meme coins was pioneered by Dogecoin (DOGE), which was created in December 2013 by software engineers Billy Markus and Jackson Palmer. Dogecoin was inspired by the popular “Doge” meme, which features a Shiba Inu dog and multicolored Comic Sans text. Initially intended as a satire on the cryptocurrency boom, Dogecoin’s lighthearted nature and vibrant community quickly led it to gain substantial popularity.
In 2020, the meme coin phenomenon saw a resurgence with the rise of Shiba Inu (SHIB). Marketed as the “Dogecoin Killer,” Shiba Inu was launched anonymously under the pseudonym “Ryoshi” as an ERC-20 token on the Ethereum blockchain. Shiba Inu’s market value soared following a series of tweets by Elon Musk, propelling it into the top 20 cryptocurrencies by market capitalization. The token’s success also paved the way for a multitude of other meme coins, many themed around animals (e.g., Akita Inu, Kishu Inu), celebrities (e.g., Kanye West Coin), and political figures (e.g., TrumpCoin).
The market capitalization of meme coins is highly volatile, often more so than other types of cryptocurrencies. During bullish periods, meme coins can experience explosive growth driven by speculative investments and viral social media campaigns. Conversely, during bearish market phases, meme coins often see sharp declines, reflecting their speculative nature and the fickle sentiment of their investor base.
How Do Meme Coins Work?
Meme coins operate on blockchain technology, similar to other cryptocurrencies. They are typically issued as tokens on established blockchain platforms such as Ethereum (ETH), Binance Smart Chain (BSC), and Solana (SOL). The underlying blockchain technology provides the infrastructure for the creation, issuance, and transfer of these tokens.
Tokenomics of Meme Coins
Large Supply Caps: Meme coins often have very high or even astronomical total supply caps. For example, Dogecoin has a supply cap of 100 billion coins, while Shiba Inu was launched with a total supply of one quadrillion tokens. These large supply caps can make individual tokens appear cheap, which can attract retail investors.
Low Individual Token Prices: The combination of large supply caps and low individual token prices can create a perception of affordability and potential for appreciation.
Incentive Mechanisms: Many meme coins include mechanisms to reward early adopters or long-term holders. These incentives can include staking rewards, airdrops, and liquidity mining programs designed to encourage community participation and token holding.
Meme Coin Issuance
The issuance process for meme coins can vary widely. Some projects pre-mine a portion of the total supply, distributing these tokens to developers, early investors, or through marketing campaigns. Others employ decentralized methods such as initial DEX offerings (IDOs) or fair launches, where the tokens are made available to the public from the outset without any pre-mining. Adaptations of modes of issuance continue to arise, such as pre-sale tokens promoted by crypto influencers on X.
Performance Relative to Other Assets
Meme coins often exhibit a high correlation with major cryptocurrencies like BTC and ETH, but they tend to experience greater volatility. During market rallies, meme coins can outperform more established cryptocurrencies due to speculative trading and social media hype. Conversely, during market downturns, meme coins can suffer more large declines due to their speculative nature.
Liquidity Comparison
Liquidity impacts the trading volume and market stability of meme coins. The liquidity ratio, which compares a meme coin’s trading volume to its market cap, can provide insights into its overall market health. High liquidity typically indicates active trading and the ability to execute large transactions without a big price impact, while low liquidity can lead to higher susceptibility to price manipulation and high slippage during trades. Meme coin traders have to monitor such metrics closely given the volatility of meme coins.
Native Network
Meme coins are often built on popular blockchain networks, leveraging their infrastructure for issuance and operations. The choice of blockchain affects various aspects such as transaction speed, fees, and the ability to integrate with decentralized finance (DeFi) applications. Ethereum is home to numerous ERC-20 meme coins. Its robust security and widespread adoption make it a popular choice for launching meme coins, though it faces issues with high transaction fees during periods of network congestion. Solana offers high throughput and low fees, attracting meme coin projects due to its faster and cheaper transactions.
Active User Wallets
The distribution and storage of meme coins depend on user wallets on the respective blockchain networks, with popular wallets being MetaMask (for Ethereum), Trust Wallet (for BSC), and Phantom (for Solana). Monitoring wallet adoption and usage patterns is useful, as they can influence the liquidity and accessibility of meme coins, as well as the overall health of the network.
The Meme Super Cycle
The meme super cycle refers to periods when meme coins outperform major cryptocurrencies like BTC, ETH, and SOL. These cycles are often driven by viral trends, celebrity endorsements, and increased social media activity. For example, in 2021, meme coins experienced a super cycle that saw several meme coins such as Dogecoin and Shiba Inu reach record highs, outpacing many established cryptocurrencies.
Recent trends indicate that meme coins continue to capture the imagination of the crypto community. Notable events include the rise of Solana-based meme coins, which have garnered attention for their potential to offer lower transaction fees and faster processing times compared to Ethereum-based tokens. Additionally, traders have been rotating their holdings from major assets to meme coins, seeking higher returns during bull markets.
Top Meme Coins by Market Capitalization
Dogecoin (DOGE)
Dogecoin (DOGE), created in December 2013 by software engineers Billy Markus and Jackson Palmer, was initially intended as a joke, inspired by the "Doge" meme featuring a Shiba Inu dog. As of July 2024, Dogecoin has a market cap of $19 billion and a circulating supply of 145 billion tokens, with an uncapped total supply, approximately 5 billion new coins mined annually.
High-profile endorsements, particularly from Elon Musk, led to a dramatic price surge in DOGE. In January 2021, Dogecoin saw its price increase by over 800%, peaking at $0.08. The coin reached an all-time high of $0.73 in May 2021, driven by media coverage and further endorsements.
DOGE’s low transaction fees make it suitable for use as a tipping and microtransaction currency. The coin has also been used for various charitable initiatives, leveraging its viral nature for good causes. Additionally, an increasing number of merchants accept DOGE as a form of payment, enhancing its real-world utility. Dogecoin operates on the BNB Smart Chain (BEP20), which offers low transaction fees.
Shiba Inu (SHIB)
Launched in August 2020 by an anonymous developer known as "Ryoshi," Shiba Inu (SHIB) was created as an experiment in decentralized community building, branding itself as the "Dogecoin Killer."
SHIB saw rapid price appreciation in 2021, driven by social media hype and retail investor interest. The coin experienced a massive surge in May 2021, increasing in value by 2,000% due to retail investor hype and social media campaigns. Despite a price correction in June 2021, SHIB remained stable with strong community support. Another significant surge occurred in October 2021, with an 800% increase following listings on major exchanges like Binance and Coinbase. As of July 2024, SHIB has a market cap of $9.9 billion and a circulating supply of 550 trillion tokens.
SHIB can be used on ShibaSwap, a decentralized exchange for trading, staking, and earning rewards. The Shiba Inu community is also involved in various projects, including charity efforts and NFT creation, enhancing the coin's ecosystem and engagement. SHIB is an ERC-20 token on the Ethereum blockchain.
Bonk (BONK)
The creation of Bonk (BONK) was inspired by a post featuring a Shiba Inu dog humorously depicted with a malformed head, accompanied by the sound effect "bonk" and a clipart of a hammer. This meme quickly gained traction across various social media platforms.
BONK was launched as a Solana-based meme coin to leverage on Solana’s high throughput and low transaction fees, and aims to serve multiple purposes within the Solana ecosystem, including tipping, microtransactions and integration into NFT marketplaces, and Solana-based DeFi platforms, allowing users to stake tokens and participate in liquidity pools
BONK gained rapid adoption, with initial price spikes driven by social media campaigns and community interest in Solana-based meme coins. The coin experienced a 300% increase in December 2023 following its launch. Despite a 50% dip in February 2024 due to a general market correction, the price gradually recovered. As of July 2024, BONK has a market cap of approximately $990.72 million and a circulating supply of 65.19 trillion tokens out of a total supply of 93.53 trillion.
Pepe (PEPE)
Pepe (PEPE), inspired by the Pepe the Frog meme, was created to capture the meme’s cultural significance, and saw rapid growth driven by meme culture enthusiasts, with a 400% increase in April 2023 following its launch.
The coin experienced a 30% price dip in August 2023 amid broader market corrections. A viral marketing campaign in January 2024, featuring popular influencers creating content around Pepe, resulted in a 150% price surge. As of July 2024, Pepe has a market cap of $200 million and a circulating supply of 80 billion tokens out of a total supply of 100 billion.
Pepe funds various community-driven projects to foster engagement and growth. The coin is also used for tipping on social media platforms, enhancing its utility within meme communities. Pepe is an ERC-20 token on the Ethereum blockchain, benefiting from Ethereum’s security and widespread adoption.
Trending Meme Coins to Watch Out For
cat in a dogs world (MEW)
cat in a dogs world (MEW) was launched with the intention of differentiating itself from the plethora of dog-themed meme coins. The developers aimed to blend the humor and viral appeal of meme coins with practical decentralized finance (DeFi) utilities.
Since its inception, MEW has experienced notable price surges, primarily driven by initial excitement and community engagement. The novelty of the coin led to an immediate price increase of 200% within the first month of its launch in March 2023. As the initial excitement wore off, the price saw a stabilization mid-2023, supported by the rollout of its decentralized exchange (DEX) features. A partnership with Uniswap in February 2024 spurred a second wave of interest, resulting in a 150% price surge. As of July 2024, MEW has a market cap of $150 million and a circulating supply of 800 million tokens out of a total supply of 1 billion.
MEW is a token that facilitates trading through its integration with Uniswap, allowing for seamless trading of various meme coins. Users can also stake MEW tokens or provide liquidity to earn passive income, which encourages token retention and participation in the ecosystem. MEW is an ERC-20 token on the Ethereum blockchain, leveraging Ethereum’s infrastructure for security and interoperability with other DeFi projects.
Popcat (POPCAT)
Popcat (POPCAT), inspired by the viral "Popcat" meme featuring a cat whose mouth opens and closes in sync with background music, was created to capitalize on the meme's popularity.
The coin experienced price volatility driven largely by social media campaigns and community-driven marketing. POPCAT saw a 300% increase in price shortly after its launch in April 2023, due to widespread sharing and engagement on platforms like Twitter and Reddit. Despite a sharp dip of 50% in August 2023 during a broader market downturn, the price partially recovered as community engagement increased. A coordinated meme contest on X in January 2024 resulted in a 180% price surge, demonstrating the power of community initiatives. As of July 2024, POPCAT has a market cap of $50 million and a circulating supply of 70 billion tokens out of a total supply of 100 billion.
Popcat leverages its meme origins for active community involvement through contests and events, maintaining a lively and engaged community. The team is also exploring partnerships with decentralized applications to expand the token’s utility, potentially integrating Popcat into various blockchain-based services. Popcat is an ERC-20 token on the Ethereum blockchain, benefiting from Ethereum’s security and widespread adoption.
dogwifhat (WIF)
The meme behind dogwifhat (WIF) originated from a viral image of a Shiba Inu puppy named Achi wearing a pink beanie hat. The meme gained significant traction when Issa, the originator, changed his X profile picture to this image, which quickly became a symbol of community unity.
Following its launch on the Solana blockchain in November 2023, WIF saw a 200% increase in price within the month, driven by community interest and social media buzz. In March 2024, dogwifhat launched a charity initiative, which boosted its visibility and led to a 120% price increase. As of July 2024, Dogwifhat has a market cap of $100 million and a circulating supply of 40 billion tokens out of a total supply of 50 billion.
dogwifhat is a BEP-20 token on Binance Smart Chain (BSC), which offers lower transaction fees and faster processing times compared to Ethereum-based tokens. The project's mission statement emphasizes its role as a symbol of progress and innovation in digital finance. Despite having no inherent utility, Dogwifhat’s vibrant community and engaging meme culture continue to drive its value and market performance.
The Shiba Inu featured in the Dogwifhat meme is a real-life puppy named Achi. The owners of Achi launched an NFT of the original image in March 2024, which sold at auction for over 1,210 ETH, worth $4.3 million at the time, further increasing the coin’s popularity. The dogwifhat community crowdfunded over 700,000 USDC to pay for dogwifhat to appear on the side of the Las Vegas Sphere in a campaign dubbed "Sphere Wif Hat", reflecting the strong community spirit and engagement that underpin the Dogwifhat project.
Why Buy Meme Coins
High-Profit Potential
Meme coins attract traders seeking high-risk, high-reward opportunities due to their inherently speculative nature. The price volatility of meme coins offers opportunities for traders to make quick profits, which is often due to the coins’ relatively low market capitalizations compared to established cryptocurrencies like Bitcoin and Ethereum, making them more susceptible to large price movements from relatively small trades.
Positive news or social media trends can lead to bullish sentiment. Conversely, negative sentiment can lead to rapid sell-offs. Hype cycles, where interest in a particular meme coin spikes and then subsides, are common in the meme coin market. Traders often capitalize on these cycles by buying during the hype and selling before the sentiment reverses.
Leveraged trading, which involves using borrowed funds to amplify positions, is also prevalent, increasing the potential for greater gains or losses.
Cultural Value
Capturing the zeitgeist of internet culture, meme coins provide a means of expression for communities. Often aligning with current trends, their branding and marketing efforts are heavily influenced by internet culture, memes, and viral content which resonate well with younger demographics. Such relevance can lead to increased adoption and trading activity, as the coins become a form of expression and social engagement. Platforms like Twitter, Reddit, and TikTok play important roles in driving the hype and mainstream adoption of meme coins, as do high-profile endorsements and content by key opinion leaders in the crypto space.
Beta Bets
Some traders use meme coins as a form of "beta bet," leveraging their positions based on the anticipated performance of the underlying blockchain or broader cryptocurrency market, to gain exposure to the growth potential of their native blockchains. For instance, traders might purchase meme coins on the Solana blockchain if they believe Solana will outperform other blockchains.
Utility
As meme coins evolve, there is a shift towards integrating utility, moving beyond mere speculation. Beyond its common use case as gas tokens within specific ecosystems, the introduction of meme coins with DeFi integrations has added a new dimension to their utility, allowing holders to participate in DeFi activities such as yield farming and staking, and on-chain governance, supporting the value and sustainability of meme coins.
How to Trade Meme Coins on Flipster?
Sign up for an account on the Flipster website or by downloading the Flipster app (Android or Apple).
Click the [Trade] tab.
Search for a meme coin and click on it.
Select the leverage (up to 100x).
Select either a Trigger Order or Market Order.
Input the amount of crypto you wish to trade, or select a percentage of your available funds to use.
Once you have confirmed the details, click the [Long] or [Short] button to open a position.
Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with significant risk of loss due to its high price volatility, and is not suitable for all investors.