A Complete Guide from Meme Coin Basics to Investment

A New Asset Class Created by Internet Culture

The world of cryptocurrencies continues to evolve rapidly, and among them, meme coins are gaining attention as a phenomenon with a unique position. These are cryptocurrencies based on internet humor and pop culture trends, forming a market approach different from traditional cryptos aimed at solving technical issues.

Since the birth of Dogecoin in 2013, through the Trump meme coin boom of 2024–2025, and the announcement of meme coins by political leaders in various countries, these digital assets have experienced astonishing market growth. This article systematically explains what investors need to know about meme coins, from their basic mechanisms to cautionary points.

What Are Meme Coins?

Definition and Basic Characteristics

Meme coins are cryptocurrencies inspired by internet memes, popular cultural phenomena, or humorous concepts. Unlike traditional cryptocurrencies like Bitcoin or Ethereum, which focus on solving technical problems or creating utility, meme coins are built on different value standards.

Five features that define meme coins:

1. Cultural Foundation: Based on internet memes and trending cultural phenomena, bringing the lightheartedness and fun of internet culture into the crypto space.

2. Community-Driven: Forming strong, humorous communities where investors and fans share common values, fostering a sense of camaraderie.

3. Limited Utility: Most meme coins have no clear use case beyond enabling trading and exchange. Few provide access to specific services.

4. High Volatility: Extremely speculative, with prices sometimes soaring dozens of times in a few days or dropping over 90% in a single day.

5. Dependence on Social Media: Influences from celebrities’ statements and trends on platforms like X (formerly Twitter) and TikTok often directly impact prices, with rapid information dissemination moving markets significantly.

Relationship with “Shitcoins”

The term “meme coin” is sometimes used interchangeably with “shitcoin,” which refers to cryptocurrencies with little or no value, authenticity, or utility. However, supporters argue that “some meme coins have gained significant social value, reached market caps that cannot be ignored, and are influencing the entire crypto market.”

Development and Market Changes of Meme Coins

2013: Birth of Dogecoin

The history of meme coins begins with the creation of Dogecoin in late 2013. Based on the popular “Doge” meme, this coin was initially a joke, but it sparked the creation of countless other meme coins afterward.

From 2021 onward, supported by Elon Musk’s endorsement, Dogecoin gained prominence, and by 2023, its market cap reached approximately $62 billion (about 9 trillion yen), growing from a joke to a scale hard to believe.

2021–2022: Elon Musk Effect and Media Spotlight

Meme coins surged in popularity during 2021 and 2022. Elon Musk’s tweets repeatedly influenced the market, with messages like “Dogecoin is the people’s crypto.” During this period, Dogecoin attracted unprecedented attention, and institutional investors’ interest grew rapidly.

At the same time, regulators began to scrutinize, with Thailand’s Securities and Exchange Commission regulating meme coins as digital products with “no clear purpose or substance.”

2024–2025: Politics and Meme Coins Merging

The meme coin market faced a turning point with the 2024 US presidential election. Related to Donald Trump’s victory, the Trump-related meme coin “Fart Coin” temporarily reached an evaluation of over $2 billion.

Even more notable, former President Trump announced an official meme coin “TRUMP” three days before his inauguration. The day after the announcement, its market cap hit $27 billion, and the company’s stock value reached $20 billion. However, after peaking at $70 in January 2025, it traded around $8 as of September.

2025: National-Level Meme Coin Deployment

In February 2025, President Faustin Archange Touadéra of the Central African Republic announced the national official meme coin “CAR” via his official X account. Despite this historic announcement, the value plummeted 95% within a day of trading start.

Simultaneously, Argentine President Javier Milei announced the promotion of “$LIBRA,” with the official goal of “encouraging economic growth and providing funds to small businesses.”

These events suggest that meme coins have evolved beyond jokes into a major phenomenon involving political leaders and governments.

Technical Foundations of Meme Coins

Built on Blockchain

When considering how to buy meme coins, understanding their technical foundation is crucial. Meme coins are fundamentally built on blockchain technology like other cryptocurrencies, operating in a decentralized manner without a central authority, ensuring transparency and tamper resistance.

Most meme coins are created on “existing blockchains.” Typically, individuals or groups plan and create tokens, then start marketing. In 2024, Solana and Base Chain became the most popular blockchain platforms chosen by meme coin creators.

Token Creation and Market Circulation

Many meme coins are created without practical use cases beyond being tradable and exchangeable tokens. Nonetheless, they are popular among crypto traders, with daily trading volumes exceeding $6 billion in early 2025.

This growth is supported by community-driven viral marketing campaigns. Fans organize around specific topics or fun content, and this enthusiasm directly influences price fluctuations.

Notable Meme Coin Projects

The meme coin market has grown significantly, with some tokens, despite originating as jokes, reaching market caps that cannot be ignored.

Dogecoin (DOGE)

With a market cap of about $62 billion (around 9 trillion yen), supported by a dedicated community and figures like Elon Musk, it continues to grow. In early 2025, a Dogecoin-linked ETF was approved in the US, attracting institutional investors as a new financial product.

Shiba Inu (SHIB)

Since Dogecoin’s emergence, SHIB has established an important position in the meme coin market, developing its own ecosystem.

PEPE

A token derived from internet culture memes, supported by a relatively new generation of meme coin investors.

Trump-Related Tokens (TRUMP, MELANIA)

The success of political figure-related meme coins suggests that personality-dependent tokens will continue to emerge and attract attention. The market cap of TRUMP reached $27 billion the day after its announcement.

BONK

A relatively new meme coin launched in 2022, especially popular within the Solana community. Its integration into dApp systems and NFT platforms has grown its market cap to around $3 billion.

Other Notable Tokens

Hawk reached a maximum of $490 million but then sharply declined to $25 million, with allegations of pump-and-dump schemes and insider trading. Coins inspired by various sources, such as the Central African Republic’s “CAR” and Chilean meme coin “CHILLGUY,” continue to appear in the market.

Merits and Realistic Risks of Investing in Meme Coins

Positive Aspects of Investment

1. High Return Potential

Viral nature and strong community formation can lead to rapid value increases in a short period. Some meme coins have reached extremely high market caps within days.

2. Community Participation

Joining like-minded enthusiast communities offers valuable networking and learning opportunities in the crypto space.

3. Low Entry Barriers

Most meme coins are cheaper than mainstream cryptos, making them accessible to beginners with limited funds.

4. Practical Learning Opportunities

Investing in meme coins allows newcomers to learn about blockchain technology and crypto markets.

5. Trading Opportunities

For traders seeking profits from short-term price swings, meme coins offer many small trading opportunities.

Risks to Be Cautious About

1. Extreme Volatility

Meme coins exhibit sharp price swings, making them unsuitable for stable long-term strategies. Drops of over 90% in a day are not uncommon.

2. Fraud and Loss Risks

Sudden project abandonment, pump-and-dump schemes, rug pulls, and other scams have led to significant financial losses.

3. Lack of Practical Utility

Most meme coins lack practical use cases beyond being tradable tokens, limiting long-term value propositions.

4. Liquidity Risks

Less popular meme coins often have low trading volumes, making it difficult to exit positions without incurring losses.

5. Regulatory Uncertainty

In February 2025, the SEC’s corporate finance division stated that typical meme coin trading is outside federal securities laws. However, regulatory stances may change, potentially impacting the market significantly.

Thailand’s SEC has banned meme coins, and the UK’s Advertising Standards Authority is investigating promotions, indicating regional regulatory differences.

Practical Approaches to Investing in Meme Coins

Important Preparations Before Investing

When considering how to buy meme coins, the focus should be on “mindset before buying” rather than just “methods of purchase.” It is recommended to invest only what you can afford to lose and conduct thorough prior research.

Checklist for Purchase

• Confirm project background and community size
• Investigate development team transparency and credentials
• Check liquidity and trading volume
• Verify smart contract audits
• Assess regulatory environment and legal risks

Basic Principles of Fund Management

The meme coin market is high-risk. Limit your allocation to a small percentage of your overall portfolio (e.g., 1–5%) and diversify across multiple tokens to minimize losses from individual failures.

Security and Asset Storage

Basic storage methods are similar to other cryptocurrencies:

• Exchange Wallets: Convenient but vulnerable to hacking and exchange risks
• Software Wallets (e.g., MetaMask): Self-managed but risk of losing private keys
• Hardware Wallets: Most secure, but require purchase cost

For long-term holding, consider self-management with trusted wallets.

Fundamental Differences Between Meme Coins and Traditional Cryptos

Future Outlook for the Meme Coin Market

Institutional Entry and Systematization

In January 2025, several US asset management firms announced the creation of Trump- and Musk-related meme coin ETFs. The Financial Times described it as “casino-like speculation,” indicating cautious but growing institutional interest.

The approval of a DOGE ETF symbolizes meme coins moving beyond pure speculation into traditional finance.

Potential for Increased Utility

Future meme coins may incorporate more practical use cases aiming for long-term value beyond speculation. Integration with gaming platforms, social media, and other digital ecosystems could significantly expand their utility.

Technological Evolution

Advances in blockchain technology may lead to meme coins with improved functionality, security, and sustainability.

Market Cycles and Concerns

Commentators compare meme coins to the speculative frenzy of the NFT market in 2022, warning of market cycles. Investor David Einhorn stated, “Apart from trading and speculation, there is no clear purpose, and they do not fulfill unmet needs elsewhere.”

FAQs

What is a suitable investment amount for participating in the meme coin market?

Depending on your financial situation and overall portfolio, a small amount (around 1–5%) as a high-risk asset is a realistic approach.

What are the tax considerations for trading meme coins?

Follow your country’s tax laws, keep accurate records of acquisition and sale prices, and prepare for capital gains tax reporting.

How to protect yourself from meme coin scams?

Verify project backgrounds, beware of excessive social media promotion, avoid unverified sources, and check for smart contract audits.

What if regulations tighten?

The entire meme coin market could shrink significantly, some tokens might be delisted, and investor protection regulations could be strengthened.

Summary

Meme coins, as a unique phenomenon blending internet culture and cryptocurrencies, bring a new dimension to digital finance. Unlike traditional cryptos emphasizing technological utility, investors considering buying meme coins need to understand the different value standards—community power and cultural resonance.

Since Dogecoin’s inception in 2013, this market has experienced remarkable growth, reaching a total market cap of hundreds of billions of dollars. The involvement of political leaders and media suggests signs of market maturation beyond mere hype.

Successful investors treat meme coins not as “games” but as “high-risk assets” with a cool head. Avoid being swept up by market sentiment, establish your own rules and risk management, and start with small amounts.

The future of meme coins depends on technological innovation and community maturity. Whether they remain speculative assets or establish themselves as a new form of digital value creation hinges on the wise judgment of market participants.