Meme coins gone wild

DOGE, Hawk Tuah, Donald Trump...the rise and chaos of meme coins

In December 2024, twelve friends and I partied in Tulum, Mexico for a week in an Airbnb mansion that cost about $5,000 a night. We had a house manager, a personal chef, and drivers. We partied on a yacht, drove ATVs in the jungle, and booked private tables at clubs. This isn’t a humble brag because I didn’t pay for anything. A couple of my friends had found themselves lucky at the peak of the crypto market and decided to spend it all on this luxury vacation, paid for by meme coins.

If you’re asking yourself, what the hell? That’s understandable... I was wondering the same thing. How are people getting real-rich from fake-money?

Let’s start with the basics: Cryptocurrency. Cryptocurrency is digital money. It can be bought and sold. It can be sent to people virtually like Venmo or Zelle. You can use it to buy stuff in real life, like Apple Pay. It has a public valuation, like the stock market. And like real, paper money, its value is based on perception. If the public believes in the value of cryptocurrency, more companies and vendors will accept it as payment.

People are suspicious of crypto because it’s not backed by any physical value. There’s no gold exchange like on the U.S. Dollar pre-1970s. There’s no overlord that regulates it like the Federal Reserve or intermediary banks. And because regular people don’t understand how coins are created, there are real questions involved: Who gets to make these? What are the rules?

The creation of Bitcoin, a type of cryptocurrency, was the first significant public adoption of these digital coins in 2008 and is considered the most popular. Over 15,000 businesses worldwide accept Bitcoin as a form of payment. So, let’s think of Bitcoin as the gold standard of cryptocurrency (no pun intended) as we delve into the world of meme coins.

You’ve probably heard of meme coins in the news. By definition, meme coins are cryptocurrencies based on online jokes, memes, viral moments, or any entertaining part of the online brain rot community. If you’ve been seeing “DOGE” everywhere, it’s because Elon Musk “cleverly” used the same acronym for his government initiative - DOGE (Department of Government Efficiency) - to be the same acronym as his original meme coin prodigy: Dogecoin.

Dogecoin is generally considered the first meme coin. It’s a cryptocurrency whose logo is an early internet meme of the Shibu Inu. Two developers, Bill Marcus and Jackson Palmer, created it in 2013 as a parody of Bitcoin. However, when Elon Musk tweeted about his love for Dogecoin in 2019, the currency skyrocketed in value and became the ninth most popular coin online. Today, almost $1 billion worth of Dogecoin is in the market. We hate to see this irony.

Elon Musk isn’t the only celebrity with his hands in the meme coin market. The infamous Hawk Tuah girl, after going viral during a man-on-the-street interview, created her own meme cointhe Hawk Tuah coin ($Hawk) - which was an epic fail. After peaking at a $500 million market cap, it lost almost all of its value (this coin was should really never have been trusted).

Even Donald Trump created his own meme coin, $Trump, and launched it on Jan. 17, right before his inauguration.

Bitcoin is a token with a limited supply; no new tokens can ever be created. Meme coins have a limited supply per token, but anyone can create new tokens (ex: Trump, Hawk Tuah) diluting the market and increasing volatility. 99% of meme coins that are created stayed valued at $0.

Meme coins can be made for any reason, but that reason is usually because something goes viral. It becomes a monetization of that meme. For example, a clip of online “entrepreneur” Ashton Hall went viral for his, quite literally, insane morning routine. His video starts at 3:52 am and follows him journaling, doing pushups, dunking his head in specific sparkling water, and rubbing a banana on his face. The global phenomenon birthed a new meme coin called “Routine.”

The “Routine” coin example is precisely why the meme coin market is on the rise, with over 10,000 coins currently in active circulation (remember, 99% of these are valued at $0). Using 2013 as a starting point by Dogecoin, the number of cryptocurrencies has continued to grow.

This may be correlated with the rise of Twitter and its virality or the fact that it’s extremely easy to make a meme coin. Anyone can make one—no coding experience needed. The ingredients include a bit of purchasing crypto like Solana, a meme coin creation app (ex: Coin Factory), choosing a name, image, and description - abracadabra. You’ve made a meme coin in less than 10 minutes.

As easy as the meme coin-making factory is, the entire meme coin market is just online gambling. If you are thinking this is the best get-rich-quick scheme you’ve ever heard of, it’s helpful to know that even the most popular meme coin of all time, Dogecoin (DOGE), still only makes up less than 1% of the entire cryptocurrency market

In a recent NPR interview with Alexi Horowitz-Ghazi from their Planet Money podcast, he describes the risky investment of meme coins in the words of Bloomberg Investigative reporter Zeke Faux, “some traders have made millions of dollars off of meme coins, which has helped fuel the frenzy over new ones. But Dune Analytics found that just 3% of traders have ever made more than a thousand dollars.”

The meme coin industry is a volatile game tailored to those who have their pulse (literally, to the second) of online humor. It’s a race to capitalize on pop culture. As someone who’s lost many dollars playing the game of meme coins – it’s a cautionary tale. It reminds us of when Jordan Belfort sold penny stocks to unknowing victims. Sure, you might be one of the 3% of traders who make a quick buck, although most likely not. But play if you want. May the odds ever be in your favor.