Understanding Meme Coins from Zero: Why Can Meme Coins Spark an Investment Frenzy?

In recent years, the crypto market has witnessed a remarkable phenomenon—the rise of Meme Coins. Although these assets originated from internet cultural jokes, they have generated stories of returns multiplying by dozens or even hundreds of times. According to on-chain data, the total market capitalization of the entire meme coin sector has surpassed $50 billion, with the most outstanding performers soaring far beyond Bitcoin and Ethereum.

Bitcoin has experienced a -7.68% decline over the past year, while Ethereum has fallen by -13.96%. In contrast, top meme coins have defied the trend—DOGE (Dogecoin) has a circulating market cap of $21.156 billion, with a 24-hour trading volume exceeding $21.78 million. What underlying logic is hidden behind this?

What exactly are Meme Coins?

Meme translates to “meme” or “迷因,” originally proposed by biologist Richard Dawkins in the 1970s to explain how ideas and culture spread among human societies. In the internet age, memes evolved into a cultural dissemination phenomenon—through images, videos, and other formats, they spread rapidly via humor and satire, mimicking and following trends.

In the crypto realm, Meme Coins refer to crypto assets created based on internet community culture, for entertainment or satirical purposes. They typically feature:

• Originating from an interesting idea or concept
• Issued via blockchain technology
• Rapidly spreading through community power and online networks
• Market valuation often far exceeding their technical or fundamental value

The most famous example is DOGE—a cute dog picture gave birth to this project. Later, SHIB (Shiba Inu) appeared as the “Doge killer,” followed by countless new varieties like PEPE, WIF, and more, forming a thriving ecosystem.

Why do meme coins attract investors?

Community Power and Narrative Magic

The core driver of meme coins comes from community consensus. Unlike traditional crypto relying on technological innovation, meme coins depend on stories and emotional resonance. A sufficiently interesting or satirical narrative can quickly spread online, attracting continuous inflows of capital.

DOGE has frequently trended due to Elon Musk’s endorsements, PEPE exploded in 2023 thanks to its frog meme culture, and WIF originated from a Twitter user’s creative avatar—these seemingly absurd starting points have evolved into market caps worth billions of dollars.

Low Price and a Sense of Acquisition

Meme coins often have a huge supply. DOGE has over 168 billion tokens in circulation, PEPE reaches 420.69 trillion, and SHIB even hits 589.29 quadrillion. As a result, their prices are extremely low—buying large quantities of tokens provides a psychological sense of achievement that far exceeds the appeal of buying Bitcoin at thousands of dollars per unit.

This psychological advantage is especially attractive to novice investors—spending just a few tens of dollars can acquire millions of tokens, creating a sense of massive gains that is hard to resist.

Wealth Effect and FOMO

The wealth creation stories around meme coins are countless. Although dogwifhat declined by -84.11% over the past year, its peak saw gains of dozens of times. PEPE’s market cap exceeded $1 billion within just a month of launch. These extreme profit cases are continuously circulated, fueling investors’ “Fear of Missing Out” (FOMO), prompting more to seek the next potential gem.

Entry Ticket into the Crypto World

For many newcomers, meme coins are often their first crypto assets (besides Bitcoin). Viral internet spread and media coverage make these projects the “first window” for ordinary people to understand the crypto market.

How do meme coins operate?

Essentially, meme coins follow a “viral marketing” model. Their life cycle usually follows this path:

Initial Birth — A creative idea or inspiration resonates → Community Spread — Rapid viral growth on platforms like X, Reddit, Discord → Influencer Effect — Endorsements by well-known KOLs amplify the buzz → Exchange Listing — Support from mainstream CEXs brings liquidity → Price Surge — Profit effects attract more speculators → Correction and Stabilization — Ultimately returning to rational valuation

In this process, narrative ability is the primary driving force. As long as the community approves and the story is compelling, the token can continue to appreciate. But once the hype subsides, prices can also drop sharply.

Mainstream meme coins landscape in 2024

According to the latest on-chain data, the current leading meme coins by market cap are as follows:

DOGE: The King of Meme Coins

DOGE is the pioneer of meme coins and still holds the top spot. Its daily trading volume exceeds 20 billion tokens, accounting for over 40% of the meme coin sector. DOGE’s price movements are often linked to Elon Musk’s actions—any related news can trigger market volatility.

Currently, DOGE trades around $0.13, with a 24-hour decline of -1.29%. Technically, DOGE has formed a typical head and shoulders top pattern, indicating potential further downside in the short term.

SHIB: The Evolving “Killer”

SHIB initially appeared as the “Doge killer,” but the project team has gradually endowed it with real functions—launching decentralized exchange ShibaSwap, NFT marketplace Shiboshis, and Layer 2 network Shibarium. These ecosystem developments have made SHIB more than just a meme asset.

Currently, SHIB’s circulating market cap is $13.357 billion, second only to DOGE in market recognition.

PEPE: The Purest “Meme”

PEPE’s slogan is “The Most Meme of Meme Coins”—it has no complex technical plans, only frog culture memes and a dedicated pursuit of meme spirit. Because of its simplicity, PEPE exploded in 2023 and quickly entered the top 100 by market cap, with a 70-fold increase in just one month.

Currently, PEPE’s circulating market cap is $1.66 billion, with a 24-hour trading volume of $1.51 million. From a technical perspective, PEPE has formed a reversal head and shoulders pattern, with potential for upward breakout. Investors interested in entering can watch for volume confirmation; a surge in volume can signal an upward trend.

WIF: The Rarest Supply

WIF (dogwifhat) originated from a Twitter user’s avatar idea in 2019—a Shiba Inu wearing a hat. After the image went viral online, WIF tokens were officially launched in November 2023.

WIF’s biggest feature is its limited circulating supply of only 999 million tokens, making it much scarcer compared to DOGE’s over 1.68 trillion and PEPE’s over 400 quadrillion. The current price is $0.32, with a market cap of $3.224 billion.

FLOKI: The Ecosystem Explorer

FLOKI also originated from Elon Musk’s words—he announced on Twitter that he would name his next pet dog Floki, and the project was born accordingly. Unlike pure meme concepts, FLOKI aims to build its own blockchain ecosystem.