Starting with the basics, we should focus on what differentiates Meme Coins from typical cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). Instead of owning their worth to fancy tech or practical-use cases, meme coins originate from trends, humorous or fun topics, and cultural references. While well-established digital tokens’ primary purpose is to strive for blockchain innovation and solve real-world problems, meme coins’ values broadly hinge on how viral they can go, being commonly exchanged for speculative purposes and short-term profit.
Dogecoin, Shiba Inu, and Pepe are prime examples of the shift from complex cryptocurrencies to lighthearted jests that have now become cultural artefacts and serious players in the crypto space. Unlike individual trends that are commonly known for their ephemeral nature, the fundamental structure of community-driven value creation presents itself as a permanent feature of the cryptocurrency landscape. As the meme coin sector saw growth from $20 billion to $120 billion in 2024, the countless inquiries and sceptical attitudes that have surrounded the chances of this phenomenon becoming a new asset class have drastically decreased, fostering an environment of trust, community hype, social media buzz, and cultural trends.
What Is The Cultural Aspect Of Meme Coins?
From the beginnings of classic internet memes that have been repurposed for a particular crypto audience to community-specific terms, meme coins have been a fundamental tool in building and strengthening crypto culture. Even though using the image of a cute dog or frog as a means of creating a cryptocurrency was an innocent joke in the nihilistic tradition of crypto, meme coins have penetrated language, noise, and platform, feeding the audience with a combination of tokenization and lots of unserious subject matters. Today, the world of meme coins appears as a lasting tribe that is expected to reach USD 925.2 Billion by 2035.
However, the allure of meme coins transcends their role as traffic-generating assets, tapping into the primary human desires for:
- Community: The strong sense of belonging fostered by meme coins is one of the primary drivers behind the hype surrounding them and the numerous individuals who decided to embrace this world entirely. There are multiple platforms (Telegram, Reddit, etc.) that facilitate the engagement of meme coin fans in passionate discussions, with a strong aim to create a sense of identity and friendship among investors. The emotional connection between members works on shared common interests in meme coins’ underlying humor and irony, bringing together those who know how to have fun and even rebellious spirits that have been long fighting traditional financial structures.
- Entertainment: Contrary to traditional cryptocurrencies, which are more robust and imply plenty of research and serious commitment, meme coins prioritize humor and engagement. Meme coins have attracted many investors who were initially intimidated by the complexity of cryptocurrencies through the refreshing and accessible entry point they offer into the world of crypto.
What Made Meme Coins So Popular So Fast?
At the core of meme coin investing are human emotions and biases, the halo effect of celebrity endorsement, and the fear of missing out (FOMO). Let’s find out how each of the reasons mentioned above has contributed to the actual driving participation in tokens!
Impulsive emotions and anchoring bias set in motion when people saw the budget-friendly price of meme coins, leading to thoughts such as: “If Bitcoin has started from pennies and is not worth thousands of dollars, why can’t meme coins do the same?”. Numerous individuals have associated those cheap investments with big dreams, betting on the hope that history might repeat itself. Furthermore, the lottery mentality has also contributed to the wide number of young investors who approached meme coins as low risk with high potential rewards, focusing on short-term excitement rather than long-term wealth building.
The halo effect of celebrity endorsement works on influential figures spreading positive perceptions to lend credibility. For instance, Elon Musk, the father of X, who also proclaimed himself “Dogecoin’s father,” has made DOGE famous through constant mentions of its potential and generous investments.
The fear of missing out relies on nurturing absent feelings within people’s minds, which are usually followed by emotional responses and irrational decisions. When the common opinion ranks a meme coin as a golden opportunity, and consequently, prices start climbing, traders feel they have no choice but to buy it. This phenomenon is basically the financial version of “everyone’s doing it, what am I waiting for?”
How Have Meme Coins Reshaped The Way We Think About Economics?
For decades, our vision of money has implied this unequivocally serious matter that can be created solely by trustworthy entities, such as a centralized government. However, since the development of multiple billion-dollar economies through tokenization and unserious subject matters, things have drastically shifted. In a world where a token called “Fartcoin” briefly hits a $1 billion market cap, it has profoundly satirized the common belief that the higher the education you pursue, the bigger your chances for success, leading many individuals into believing that perhaps financial gains are all about lottery tickets.
Furthermore, the biggest way in which meme coins have reshaped the way we think about economics could be the tough realization that money is not as real as people make it out to be, challenging people to see the life cycle of the crypto economy in the following ways:
- Money is a social construct based on collective belief rather than inherent worth. People assign values to meme cons such as SHIB, PEPE, and DOGE mainly because of hype, community, or viral appeal.
- The thirst for financial gains influences people to rely on codes, memes, and online communities over institutions, leading to decentralized trust.
- Emotional and cultural forces can be just as powerful in shaping financial markets as financial fundamentals.
- The success of meme coins forces economists and investors to reconsider what actually gives money value. If a token can be traded, saved, and spent as real money, what other things can do that?
