Memecoins have become a major force in the market, with tokens such as Dogecoin, Shiba Inu and Pepe proving that community-driven projects can achieve significant success. Key factors driving this trend are community engagement, social media virality, low barriers to entry for retail investors and "FOMO."
Memecoins are a type of cryptocurrency inspired by internet memes and popular culture, often launched as a joke or to capitalize on viral trends. Unlike mainstream cryptocurrencies like Bitcoin or Ethereum, memecoins typically have little to no intrinsic value or practical utility, making them highly speculative and volatile assets. But data suggests that this sector has significantly outperformed traditional altcoins in the past 12 months, driven by increased retail participation and the cyclical nature of crypto trends. As the crypto market evolves, memecoins are challenging traditional notions of value and investment thesis.
Subscribe to our newsletter
The best articles of the week, directly delivered into your mailbox.
Understanding meme narratives
The current market capitalization of the memecoin sector is around $55 billion. This represents just over 2% of the total cryptocurrency market cap. The rapid growth and popularity of memecoins has indeed left traditional investors and analysts scratching their heads. Memecoins have achieved remarkable success despite lacking many of the traditional fundamentals that investors typically look for. In general, there is no clear benefit or use case. Projects are often launched as jokes or parodies, and often from unverified accounts. The sheer number of projects created is staggering. On the Solana blockchain alone, through the Pump.Fun platform, over 3 million tokens have been created. In addition, there is little to no technical development or roadmaps.
Memecoin stories are constantly evolving at a rapid pace. The sector started with animal-themed coins such as Dogecoin, which remained popular through several derivative coins and across blockchains. The Shiba narrative, for example, spilled over into Solana and manifested in BONK. Cat-themed coins began to appear, such as Popcat, which accumulated over $1.1 billion. Other trends include abstract art, emoji-based coins or cultural and personality-based coins. These have recently been inspired by figures such as Joe Biden, Donald Trump or other Hollywood celebrities. The various blockchains have also started to cultivate communities. For example, the layer 2 base chain has one of the top 10 memecoins "BRETT". Brett is a character from Matt Furie's Boys' Club comic, the artist behind the iconic PEPE meme.
Memecoins entice former Bitcoin maximalist
Once known as a bitcoin maximalist, Murad Mahmudov has become a prominent advocate of what he calls the "memecoin supercycle". He has captured the attention of crypto enthusiasts at X with his analysis and bold predictions about the future of memecoins. According to Murad's memecoin philosophy, these tokens are not just speculative assets, but cultural phenomena with significant growth potential. He argues that memecoins are a by-product of the current economic system, much like bitcoin itself, and that their rise is being driven by similar forces of disillusionment with traditional finance.
Key aspects of Murad's memecoin theory can be summarised as follows. Emotional resonance is a key to finding undervalued memecoins. The meme has to make you feel something. Second is cultural significance. Memecoins fill a void in modern society, potentially replacing traditional sources of meaning. Then successful memecoins require the strength of the community. In particular, the most active members of a project are crucial, as they are the ones who shape its culture. These points culminate in what Murad summarises as "cult" memes. Murad shows a strong belief in the sector and gives very optimistic price targets. This is based on the assumption that the memecoin market could potentially siphon off speculative trading from the altcoin market.
Memecoins are a sign that the Crypto Industry is Maturing.
For a decade, Altcoins were largely Speculation Vehicles (Gambling Chips)
Memecoins will absorb most of the Speculation Premium AWAY from Alts. pic.twitter.com/GuAUKwZ1yR
— Murad 💹🧲 (@MustStopMurad) October 16, 2024
Some of the top trading memes by market cap
The original memecoin, Dogecoin, was created in 2013 as a joke by software engineers Billy Markus and Jackson Palmer, and is still the undisputed number one with a market cap of over $18.5 billion. Elon Musk has been a notable supporter, frequently tweeting about DOGE and even accepting it as currency to purchase Tesla vehicles. Dogecoin's success undoubtedly paved the way for other memecoins. Years later, in 2022, Bonk was created as a community-driven project on Solana. The token features a Shiba Inu dog as its mascot, similar to Dogecoin. It was created specifically for Solana, with 50% of the total supply airdropped to the Solana community at launch. Utility developed over time, with widespread integration, such as use as a tipping currency or vision application in games.
Although all eyes were on Solana, other chains gained some traction. Based Brett or BRETT positioned itself as the mascot of the Base Chain, often referred to as "Pepe's best friend on the Base Chain", and launched in February 2024. Shortly after, the Runes protocol went live on the bitcoin blockchain, bringing memes to the first cryptocurrency. This made it possible to trade memes on bitcoin, bringing with it the successful dog narrative. The Rune "DOG" (Full name: DOG•GO•TO•THE•MOON) has a market cap of close to $550 million.
