Article source: Deep Tide TechFlow
Author: Binance
Compiled by: Deep Tide TechFlow
Key Points
Memecoins are a type of cryptocurrency inspired by internet culture and humor, which have quickly gained popularity due to their low prices, potential for quick profits (but with high risks), and appeal to the younger generation.
Beyond economic motivations, Memecoins have gradually become a cultural symbol, where users express identity, belonging, and even support for a larger social idea by purchasing these tokens.
Although Memecoins face challenges regarding sustainability and long-term value, some projects are attempting innovative applications that combine entertainment with real-world impact, exploring new development directions.
Memecoins, inspired by internet culture and humor, have recently made waves in the crypto market. Unlike 'traditional' cryptocurrencies aimed at solving real-world problems, Memecoins rely on the resonance of pop culture, the momentum of community, and the viral spread of memes. Their story traces back to the creation of Dogecoin (DOGE) in 2013—a cryptocurrency initially created as a joke. Subsequently, the rise of Shiba Inu (SHIB) in 2020, along with the emergence of many similar projects in the following years, further propelled this trend.
Although Memecoins have existed for many years, their popularity reached new heights this year. In November 2024, both trading volume and market capitalization soared beyond market expectations. This phenomenon also suggests a fundamental shift in people's perception of these 'alternative' assets. So, what has driven the rise of Memecoins? Let's find out!
Financial Motivation
What are the key reasons behind the popularity of Memecoins? The most direct explanation is, of course, their remarkable high-yield potential, closely tied to the intensity of their price volatility. However, a deeper analysis reveals that this phenomenon also reflects profound changes in the global economy, especially under the catalyst of internet culture.
A Reflection of the Economic Environment
As the real value of wages shrinks year by year, how should people respond? For many, this is not a hypothetical situation but a reality of life. Amidst the persistent inflation eroding purchasing power and soaring living costs, traditional financial tools seem increasingly powerless. Savings accounts offer meager returns, while investment returns in traditional markets are too slow to combat the growing economic pressures.
Thus, more and more people—especially the younger generation—are turning to alternative assets. This shift is not merely an economic choice but a symbolic expression. They view this behavior as a dissatisfaction and protest against the traditional economic system, believing that the traditional system can no longer meet the demands of the times. For digital natives, Memecoins represent a challenge to the status quo and a declaration of attitude.
'The Temptation of Overnight Wealth'
In the current financial environment, Memecoins provide a curious alternative option. Their low barrier to entry and high return potential attract investors disappointed with traditional finance. Compared to the 10% annual return considered excellent in traditional finance, the price of Memecoins can double or halve within minutes. This stark contrast attracts many young investors who hope to achieve their 'get-rich-quick' dreams through Memecoins, despite the very slim chances.
Unlike the older generation who are more inclined to buy lottery tickets, the younger generation has long seen through the odds of winning. Although Memecoins carry high risks, they are viewed as another possibility for achieving financial freedom. This seemingly attainable opportunity has led more and more people to join in, further fueling the heat of Memecoins.
The Power of Pop Culture and Community
While economic motivation is the driving force behind the rise of Memecoins, their true lasting appeal stems from the power of culture and community.
Symbol of Identity
Can light-hearted humor and dreams of wealth coexist? The charm of Memecoins lies in their deep resonance with internet community culture. For many, buying Memecoins is not just an investment but a manifestation of participation. It is a way to express self-identity, support a certain ideology, or join a larger community.
Take the Chill Guy Memecoin as an example. It is inspired by the popular meme 'Just a Chill Guy,' whose laid-back lifestyle attracts many who resonate with this value. Buying this token is not just for investment; it’s more like labeling one’s 'laid-back' personality, similar to expressing one's fashion sense through clothing.
What makes Memecoins special is their community's reverence for the concept of 'hodling' (long-term holding without selling), where even with price surges, everyone still insists on holding, perfectly embodying the relaxed and carefree essence of memes themselves. Conversely, 'paperhanding' (selling quickly during price fluctuations) is seen as contrary to this core philosophy, suggesting that one might not be a true 'laid-back person.'
For many investors, the allure of Memecoins lies not just in potential returns but in participating in a real and fun cultural movement. Memecoins like these often bridge financial goals and cultural identity, transforming investment into a symbol of identity and belonging.
Entertainment Consumption: Another Side of Memecoins
For some, the appeal of Memecoins lies not in their narratives or potential returns, but rather in the pure entertainment experience. These investors see Memecoins as a leisurely pastime—a way to purchase excitement with money, even if it comes with risks. As someone described it: 'Spending $100 on Memecoins is like buying a ticket to an amusement park.' With this mindset, investing in Memecoins is viewed as a fee for entertainment, much like purchasing movie or amusement park tickets.
In fact, many people find entertainment in the wild price fluctuations of Memecoins; they often joke that simply watching prices soar and plummet is a visual feast. The decision-making process of when to buy and sell adds even more thrill to the experience—like the ups and downs of a roller coaster, only without the physical jolt. Memecoins combine humor, risk, and unpredictability, bringing a unique, playful, and adrenaline-filled experience to the financial world.
A Ticket to Revolution
In some cases, purchasing Memecoins is not just a way of self-expression; it could also be a declaration of values. Some believe that Memecoins have the power to unite people under a common goal, transforming simple investment actions into symbols of collective belief.
The story of Gen Z QUANT is a typical example. On November 20, a 13-year-old developer launched the QUANT token through Pump.fun (a popular launching platform based on Solana). He sold 51 million tokens for 128 SOL, ultimately cashing out $30,000 during a livestream, after which he disappeared, an act regarded as a 'rug pull.' This bold move sparked widespread outrage in the crypto community. However, buyers quickly united to turn QUANT into a symbol of resistance against fraud.
This collective action caused the price of QUANT to surge by 71,386% in just six hours, peaking at $0.07876, with trading volume skyrocketing to $213.7 million. For those who bought in, holding QUANT was not just about money, but a stance against deception, changing the narrative, and sending a clear message: zero tolerance for fraud.
Rather than becoming a laughing stock after being deceived by a 13-year-old, this community chose to fight back, turning him into a meme. Had he not cashed out $30,000 at the price peak, it could have been worth over $4 million. This event showcased the potential power of digital assets, where community and shared goals can unite to break expectations and create incredible outcomes.
The Ecosystem of Memecoins: The Supporting Forces Behind
Behind every viral phenomenon lies a powerful platform and community network. This year's Memecoins craze is no exception. At the core of this wave is a Solana-based launching platform—Pump.fun. It has become the preferred platform for issuing and trading Memecoins, with its influence driving unprecedented activity on the Solana chain. On November 21, Solana's daily transaction fees reached an astonishing $14 million, exceeding Ethereum's daily average fees for 14 consecutive days.
Additionally, platforms like Coinbase's Layer-2 blockchain Base are gradually emerging, providing a stage for new and experimental tokens. On platforms like X (formerly Twitter) and Discord, active Memecoins communities inject vitality into this ecosystem. Enthusiasts share memes, discuss investment strategies, and passionately promote their favorite tokens. These platforms and communities collectively drive Memecoins from a joke-like existence to becoming an undeniable force in the crypto world.
The Future of Memecoins: A Joke or a Legit Asset Class?
As Memecoins continue to evolve, one can't help but wonder: will they merely be a fleeting trend, or can they evolve into a long-lasting asset class?
Just a Financial Joke?
The price volatility of Memecoins is extreme, with their value relying more on speculation and market sentiment than on actual utility. Prices can double in minutes or be cut in half in that same timeframe. This high-risk, high-reward characteristic is particularly dangerous for novice investors. Before you 'blindly enter the market,' be sure to do your homework (DYOR) and develop an effective risk management plan to minimize potential losses.
Many Memecoins lack clear practical uses or long-term development plans, making it challenging for them to maintain popularity. Their initial appeal often stems from cultural resonance, market hype, and community enthusiasm, but such short-term drivers are hard to sustain long-term value. Once market hotspots shift, funds may flow to projects with clearer utility or growth potential, leading to decreased demand for Memecoins, falling prices, and ultimately rendering tokens worthless in investors' hands.
A 'Legitimate' Joke?
Although most Memecoins may struggle to survive long-term due to a lack of actual utility, a few projects have begun exploring entirely new development directions. They no longer solely rely on hype but are trying innovative applications to redefine the value of Memecoins.
For example, projects like RIF and URO have ventured into decentralized science, allowing token holders to gain intellectual property rights (IP) over experimental results. This innovative model marks an evolution of Memecoins, paving the way for their transition from entertainment origins to practical applications. The rise of this trend is driven by Pump.fun, which has helped projects like RIF and URO gain market attention. This shift indicates that Memecoins are trying to combine fun with real-world impact.
Conclusion
Memecoins have long transcended being mere jokes or fleeting trends; they are gradually becoming a blend of financial opportunity and cultural expression. Although the volatility of these assets remains a significant characteristic, some projects are attempting to combine fun with practical use to ensure they remain competitive in an ever-changing market. If you want to delve deeper into this dynamic asset called Memecoins, you can refer to the rich resources provided by Binance Academy to help you make more informed investment decisions.
