Memecoins have undeniably played a pivotal role in driving the mainstream appeal of cryptocurrencies. While opinions differ on whether they represent a positive or negative impact, their cultural and financial impact is hard to dismiss. The idea behind memecoins is deceptively simple: imbue internet culture with monetary value by tokenizing memes.
The memecoin movement was spearheaded by Dogecoin ($DOGE ), inspired by the viral "Doge" meme featuring an expressive Shiba Inu. What began as a lighthearted nod to a meme rapidly evolved into something far more significant. With its dog logo as a humorous twist on the concept of currency, Dogecoin captured the internet’s imagination.
Dogecoin quickly became a pop culture icon, standing alongside giants like Bitcoin and Ethereum. At its peak in the summer of 2021, Dogecoin eclipsed them in terms of mainstream recognition, permeating everything from magazines to TV shows. This wave of attention not only solidified Dogecoin’s place in crypto history but also opened the floodgates for a surge of other memecoins, cementing their place in the broader cryptocurrency landscape.
The phenomenon also impacted the numbers. During the last bull run, when the meme foundation took off, only a handful of memecoins were traded across exchanges—perhaps a few hundred in total. By 2024, however, the number has become incalculable. Every day, thousands of new memecoin images flood our social feeds.
TL; DR
Memecoins delivered over 2000% returns in 2024, but they come with high risks like scams and extreme volatility.
Memecoin investments require a balanced strategy—don’t go all-in; consider them as a small part of your portfolio.
To succeed, you need to follow market sentiment closely, analyze charts, and have some luck on your side.
Memecoins offer potential 10x or 100x returns, but they can also quickly lead to losses due to market unpredictability and bots.
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Why Memecoins Are Important
While this take may sound silly, memecoins have actually played a pivotal role in the popularity of cryptocurrencies. They have helped many new users onboard into the crypto world. Although the space is rife with scams, rug pulls, and false hope, the memecoin ecosystem remains exciting.
Memecoins have gained so much hype and popularity that a specific sector of meme issuance has emerged. Read about Meme Issuance. Every possible blockchain is now trying to capitalize on the opportunity by building their own native meme issuer or meme launchpad.
The phenomenon started with the Solana-based Pumpdot(.)fun, and now it's mainstream. Protocols are earning as much as major DEXes, with memecoins serving as the foundational layer.
If you strip away the crypto-native complexity, there’s an even greater chance that people will hear about memecoins due to their ROI. Memecoins have been the biggest driver of the mini-bull run we experienced in 2024. Retail investors are joining en masse, and memes are one of the few opportunities alongside specific narratives currently working in crypto.
Growth of Meme Sector
Barely a minimal few hundred-million-dollar industry in 2020, memecoins are now worth more than $50 billion as a whole. As a category, they are among the brightest in the crypto space. There was a time when having a memecoin in the top 100 was a huge deal, but now there are dozens of memecoins hovering around the top 100, and this has become the new normal.
According to Dune Dashboard Analytics, memecoin valuations hit an all-time high (ATH) again in 2024. However, the sheer number of memecoins is staggeringly large, which means that the market cap per coin is significantly lower compared to other categories. This is understandable, given the short life cycle of memes, and the fact that thousands of new ones emerge daily.
Since the emergence of memecoins in 2014, their overall market cap has fluctuated greatly. The first major upward move occurred in Q2 2017 (+1,198%), when the total market cap of memecoins reached $343 million. In Q1 2018, the market crossed the $1 billion mark for the first time, after which it ranged between $250 million and $900 million. Another period of growth happened in Q1 2021 (+1,287%), pushing the memecoin market cap to $7.2 billion. By the end of 2021, it had skyrocketed to between $30 billion and $60 billion.
The crypto winter of 2022–2023 caused the overall memecoin market cap to drop to between $17 billion and $21 billion. In Q4 2023, the market consolidated around $22 billion before experiencing another surge. In Q1 2024, the memecoin market cap grew by 169%, reaching $60 billion, nearing its ATH. Due to ongoing interest in memecoins, the overall market cap could now range between $60 billion and $75 billion.
According to DEX aggregator data, between 40,000 and 50,000 new crypto tokens are created daily, with this number reaching up to 100,000 during periods of viral hype. Solana leads the charge, with 17,000 to 20,000 new tokens generated each day.
Memecoin investment risks
Memecoins have produced some of the biggest gains in 2024, but investing in memecoins has always been tricky and full of risk.
🔸Widespread scams: The most concerning issue with memecoins is the prevalence of scams. Around 40% of projects are affected by pump-and-dump schemes, 30% are rug pulls, 20% impose extra fees, and 2-3% are honeypot scams. Only a small fraction of memecoins emerge genuinely due to a strong cult-like community, and of those, only about 5-10% manage to survive.
🔹High volatility: Cryptocurrencies are inherently volatile, but memecoins amplify this volatility. Memecoins are 50 times more volatile than Bitcoin, and their price swings are unpredictable even when analyzing market dynamics. You can't forecast the erratic behavior of a memecoin.
🔸Lack of objective data: Although tools exist for researching memecoins, people still often buy based on the name alone. These tools are either too complex for the average user or react too slowly. In a matter of 30 minutes, significant data shifts can occur, making accurate research a challenge.
🔹Short lifespan: Memecoin projects can be abandoned at any moment. Their survival hinges on hype—once that fades, the coin is doomed. If you buy at a high price, recovery is unlikely. Most memecoins often die after a few rounds of sell-offs.
🔸Manual traders losing to bots: Trading bots have a clear advantage over manual traders, executing transactions at speeds impossible for humans to match. This leads to losses or missed opportunities. Bots can also cause sudden price fluctuations, further increasing market volatility and making it harder for regular users to navigate.
🔹Lack Of Regulation: Memecoins operate in a largely unregulated space. This means there's little to no consumer protection in place. Scammers exploit this lack of oversight, and legal recourse is often limited or non-existent for victims of fraud.
🔸Low liquidity: Many memecoins suffer from low liquidity, meaning that when you want to sell, there may not be enough buyers. This can lead to significant price drops when large holders decide to cash out, trapping smaller investors in a rapidly depreciating asset.
🔹FOMO-driven investments: The "Fear of Missing Out" (FOMO) often drives memecoin investments. People buy into these projects based on social media hype or celebrity endorsements, without fully understanding the risks. This emotional trading leads to poor decision-making and massive losses.
🔸No real use case: Most memecoins lack a functional or practical use case. They're driven purely by speculation and community hype. Without any tangible value or application, their survival depends entirely on market sentiment, which is unpredictable.
Should You Invest in Memecoins?
In 2024, the memecoin sector delivered returns of over 2000%, which is 6x more than the second-best, RWAs. Many coins achieved 100x gains in just a few months, despite the choppy market. But with all those risks and benefits, are memecoins still worth investing in?
Actually, it depends on your portfolio and strategy. If you already hold a strong bag of fundamentally sound assets, you can definitely allocate a portion of your portfolio to memecoins. This can help balance your portfolio. However, going all-in on memecoins is likely a bad idea.
There needs to be a strategy. If you can track market sentiment and analyze advanced charts with data, you might succeed in chasing the next 100x—if you're lucky, of course. But there’s no guarantee, as sentiments in memecoins change faster than in normal markets.
There's no denying that memecoins can give you an easy 10x return, but you either need to be lucky, a super researcher, or both. You could start putting money into random memecoins on Dexscreener, but that will only increase or decrease the probability of getting rekt. To be successful in the memecoin sector, you have to be fast, smart, and, of course, lucky.
Coins like Pepe, Shiba, $BONK , $WIF Already Did 100x but there're 99% memecoins sitting -90%. You must Go through extensive research before investing Money into these memes.
🎟️ Some Goodreads
> How To Research On Memecoins
> Top BNB Memecoins To Buy In 2024
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> BDC Consulting
> Binance
> beINcrypto
> Messari
> Dune Analytics
