Memecoins uncovered: The hype, the risks, and what you need to know

Yuhman 5 min read
Invest

The hype explained

Have you ever stumbled across quirky names like Dogecoin, Shiba Inu, or Official Trump and wondered, «What’s the deal with these?» Welcome to the world of memecoins, ryptocurrencies born out of internet culture, viral jokes, and, of course, memes. They’ve taken the digital world by storm, but before you dive in, let’s break down what they are and why you should be careful with them.

Header illustration for the YuhLearn article about memecoins. Shows a phone with memecoins floating around it. Header illustration for the YuhLearn article about memecoins. Shows a phone with memecoins floating around it.

What are memecoins?

Memecoins are cryptocurrencies that derive their value primarily from internet culture, memes, and online communities rather than technological innovation or financial utility. Unlike Bitcoin, which was designed as a decentralised alternative to traditional money, or Ethereum, which enables smart contracts, memecoins often have no clear purpose beyond speculation and entertainment.
Remember, not all trends are gold—sometimes, it’s just a meme.
Illustration table of a comparison between major cryptos and memecoins

How they differ from major cryptos

Illustration of 5 different memecoins with Dogecoin, Shiba Inu, Pepe, Official Trump and Official Melania

Popular examples

Dogecoin (DOGE)
Started as a joke based on the Shiba Inu dog meme, it gained popularity due to its active community and widespread internet appeal.
Shiba Inu (SHIB)
Dubbed the «Dogecoin killer», this token capitalised on the popularity of the Doge meme and created a decentralised ecosystem around it.
Pepe (PEPE)
Inspired by the famous Pepe the Frog meme, it gained massive traction in 2023.
Official Trump (TRUMP)
A politically themed memecoin that taps into Trump’s public persona and media presence.
Official Melania (MELANIA)
Launched after the hype of the Trump memecoin, the First Lady’s coin follows the same speculative trends.

Dogecoin’s evolution:
From meme to market giant

Dogecoin began as an internet joke in 2010, when an image of a Shiba Inu dog named Kabosu became a viral meme. Known for its absurdist humour, the Doge meme spread across social media and eventually inspiring software engineers Billy Markus and Jackson Palmer to create Dogecoin in 2013. Designed as a parody of Bitcoin, Dogecoin quickly gained traction as an online tipping currency and was used for crowdfunding projects, including sponsorship of the Jamaican Olympic bobsleigh team and a NASCAR car.
 
Despite its origins as a joke, Dogecoin has remained one of the most recognisable cryptocurrencies, driven largely by its community rather than technological innovation. While its price has seen massive spikes—particularly in 2021 due to retail hype and endorsements from Elon Musk – its value remains highly speculative.

The risks behind the hype

While Dogecoin has survived, most memecoins have not. Their prices are dictated by internet trends rather than intrinsic value, making them highly risky investments.
 
Here are the main concerns:
 
  • Extreme volatility
    Memecoins can skyrocket by 1000% in a matter of days and crash just as quickly. A viral tweet or influencer post can send prices soaring overnight, only for the hype to evaporate just as quickly.
  • Scams and rug pulls
    Many memecoins are created pure as pump-and-dump schemes. Developers can artificially inflate the price and then sell off their holdings, leaving investors with worthless tokens.
  • Regulatory concerns
    Because memecoins are often speculative and unregulated, governments may crack down on them, making them harder to trade or even banning certain projects.
  • No fundamental value
    Unlike Bitcoin (which is increasingly seen as a store of value) or Ethereum (which powers decentralised applications), memecoins exist primarily for entertainment and speculation, with no inherent utility.
The $SQUID token scam
In late 2021, riding the wave of Squid Game hype, a mysterious new token called $SQUID appeared. It was supposedly an official Squid Game cryptocurrency (spoiler: it wasn’t), promising a play-to-earn game where users could compete for crypto prizes, just like on the show. Sounds fun, right? Well, it was—for about five minutes. Investors got FOMO and the price shot up to 2’800 USD.
 
The catch? No one could sell. The contract had a sell restriction, trapping holders in a financial squid game. And then, in a split second, the anonymous developers dumped everything and disappeared. The price of the token plummeted from 2’800 USD to 0.0007 USD in seconds – wiping out millions of investors’ money.
 
Moral of the story: Always check before you invest. Just because something looks promising doesn’t mean it’s legitimate or worth investing in.

Should you invest in memecoins?

Memecoins can be highly profitable for those who time the market correctly, but there are significant risks involved.
 
Before investing, consider the following:
 
  • Do your own research (DYOR)
    Understand the coin’s background, purpose, and the team behind it. Don’t invest on hype alone.
  • Assess your risk tolerance
    Never invest more than you’re willing to lose, as memecoins are highly unpredictable.
  • Diversify your portfolio
    Don’t put all your money into memecoins—balance them with more established investments.

Are memecoins worth the excitement?

Memecoins are speculative assets with the potential for massive gains, but also high risk. They are driven by hype, community engagement, and internet trends rather than real-world utility.
 
If you decide to invest, do so with caution. Stay informed, diversify your holdings, and never invest more than you can afford to lose. Remember, not all trends are gold—sometimes, it’s just a meme.
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