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Meme coins, a quirky subset of cryptocurrencies, are inspired by internet memes, injecting humor and novelty into digital assets. With their lighthearted origins and unpredictable trajectories, meme coins exemplify the playful spirit of internet culture, offering both entertainment and investment opportunities in equal measure. A prime example is the Dogecoin (DOGE) that emerged in 2013 as a satirical take on the crypto frenzy – it quickly gained traction thanks to its vibrant community and viral appeal on platforms like Reddit.  

In this article, FBS financial markets analysts explore the landscape of meme coins dividing them into two broad parts – “the good” and “the bad and the ugly”. The experts look at the inception of memecoins and evaluate the potential impact of these assets on the broader cryptocurrency market.

The Good

Several projects have emerged as noteworthy contenders within meme coins, demonstrating their reliability and dedication to the meme community.

As highlighted earlier, Dogecoin stands out as the pioneer of meme coins, boasting the largest market capitalization in the space. However, beyond Dogecoin, there are other notable participants worth considering such as Shiba Inu (SHIB), Pepe (PEPE),  Floki (FLOKI), and Bonk (BONK).

Shiba Inu (SHIB)

Shiba Inu (SHIB) appeared in 2020. Unlike Dogecoin, the creator of Shiba Inu remains anonymous and is only known to the crypto community as RYOSHI. Interestingly, the creators of SHIB did not keep any tokens for themselves, ensuring that all buyers entered the market on an equal footing. 

Despite a quiet start, SHIB gained significant momentum in March 2021 when Elon Musk’s tweet expressing interest in a Shiba Inu puppy inadvertently boosted the coin’s popularity. This led to SHIB becoming one of the top 20 cryptocurrencies by market capitalization, with its value soaring 2,000 percent in just five days and more than 27 million percent between January and October 2021. In October 2021, an unknown large buyer spent $1.2 million on SHIB tokens. To maintain its value, the creators of Shiba Inu have created an ecosystem consisting of three tokens, SHIB, LEASH, and BONE, and a decentralized exchange, ShibaSwap. Technically, Shiba Inu operates as an ERC-20 token on the Ethereum blockchain.

Pepe (PEPE)

Pepe, a green frog with a turbulent history, first rose to prominence among American far-right political groups before being reincarnated in April 2023 as the most popular meme coin. Despite the PEPE cryptocurrency’s frenzy, the original artist behind the Pepe character claims not to have profited from its crypto iteration. With a total supply of 420 trillion PEPE tokens, a nod to the marijuana-related meme “4.20,” its market capitalization reached $1 billion within three weeks of launch. Within slightly over a month, this cryptocurrency saw a staggering 10,000-fold increase in value.

Floki (FLOKI)

In June 2021, Elon Musk announced on Twitter that he would name his pet Shiba Inu as “Floki”, which prompted the creation of the Floki Inu coin. When Musk announced on 12 September that his family had acquired the dog, FLOKI tokens were already actively traded on the market. 

Over the past year, Floki has grown 287%, bringing its market value to $1.54 billion. Despite challenges such as regulatory scrutiny in some regions, Floki’s commitment to real utility and global philanthropy has kept investors interested.

Bonk (BONK)

Bonk is the first “dog” meme coin created on the Solana blockchain. Exactly half of the initial issuance was distributed to the community via an airdrop, a move aimed at supporting the Solana ecosystem following a sharp decline in the token’s value. Indeed, the introduction of BONK sparked activity within the ecosystem, leading to new meme tokens, token burn events, the creation of NFT collections, and more. 

BONK’s tokenomics include a massive 100 trillion token hoard, a significant portion of which is dedicated to supporting the Solana ecosystem, including NFT projects, DeFi users, and developers. 

In 2024, most major meme coins have ridden the wave of Bitcoin’s momentum, but their gains have been much larger. For example, while Bitcoin rose 71% from the first of February to a new record high of $73,589 on 14 March, BONK rose 254% from 1 February to 5 March.

The Bad and the Ugly

Having considered “the good” and “the bad” examples of meme coins, FBS analysts suggest delving into the behavior of dodgy meme coins like WSB Coin (WSB), SafeMoon, and BULL. They shed light on the prevalence of fraudulent projects within this realm. Such cautionary tales serve as a stark reminder of the importance of conducting thorough research and due diligence before venturing into the volatile world of cryptocurrency investment.

WSB Coin (WSB)

A notorious meme coin scam recently unfolded involving a moderator from the popular trading subreddit r/WallStreetBets. The group introduced a meme coin dubbed WSB Coin (WSB), claiming it as the official meme coin of Wall Street Bets, and launched it on May 2. Promoters of the WSB token pledged to reserve 10% of the coins for the subreddit, with no allocation for the development team. However, just two days later, a moderator allegedly dumped the allocated tokens on the market, resulting in a staggering decline in the token’s value.

SafeMoon 

BULL token

The cryptocurrency community was rocked by a recent scam uncovered by ZachXBT, a renowned chain detector. The scheme involved an imposter posing as Ansem, who deceitfully promoted a fake presale of “BULL” tokens in the comments section of legitimate posts by the real Ansem. This duplicitous tactic led to substantial financial losses, with one unfortunate victim reportedly losing $1.2 million. Despite ZachXBT’s efforts to warn others, the scammers brazenly siphoned an additional $250,000 from unsuspecting individuals shortly after the initial alert. The scam persisted across multiple accounts, preying on innocent investors and illicitly profiting from the frenzy surrounding meme coins. The scammers took advantage of the hype around meme coins and tricked people into buying a non-existent BULL token.

The Future of Meme Coins

The trajectory of meme coins appears uncertain yet intriguing, influenced by market trends, regulatory shifts, and investor sentiment. As cryptocurrencies gain mainstream traction, meme coins benefit from heightened interest but face challenges due to their speculative nature.

FBS analysts underscore that community strength and ecosystem development are pivotal in determining a meme coin’s longevity, while evolving regulatory landscapes pose potential obstacles. Despite uncertainties, meme coins remain attractive to high-risk investors.

Doland Tremp (TREMP) and Jeo Boden (BODEN)

External events, such as the upcoming US presidential election, could fuel the hype around meme coins associated with the names of candidates, opening up speculative opportunities. For example, investors may focus on tokens such as Doland Tremp (TREMP) and Jeo Boden (BODEN). Considering that these crypto assets are created based on the popular and rapidly developing Solana network, they also represent interesting investments, given their low capitalization.

Dogwifhat (WIF)

An interesting coin to consider is Dogwifhat (WIF). It has become one of the most prominent coins on Solana and recently became the third largest meme coin by market capitalization, overtaking Pepe (PEPE) on March 29.

Backed by a community dedicated to the project’s development, WIF has attracted attention as a cryptocurrency worth following. In particular, the community offered to place the project’s logo on the Las Vegas sphere and initiated a donation link that raised $650,000.

Dogwifhat (WIF)
 

Book of Memes (BOME)

Also, an interesting coin to consider is Book of Memes (BOME), the latest Solana-based meme coin developed by mysterious crypto artist Darksfarm1 on X. BOME aims to revolutionize Web3 culture through decentralized storage and trading of memes, preserving them as part of our digital heritage.

Launched on Binance at $0.00005, BOME has risen over 57,000% in three days, reaching an ATH of $0.0286. It’s been quite a whirlwind, with a market value of over $1.5 billion. BOME is currently at $0.01171, and its volatility highlights the excitement and difficulty of trading new tokens.

Book of Memes (BOME)
 

Takeaways From FBS Analysts

Despite the hype surrounding meme coins, it is important to recognize their unpredictability and high risk. In the last month alone, 12 of the 27 meme coins launched on Solana were abandoned after pre-sale, resulting in users losing 180,650 SOL ($26.7 million). Shockingly, one of the projects didn’t even have time to acquire a name before its demise.

While meme coins are promising, prudent investors must first be informed, conduct thorough due diligence, and cautiously approach the volatile market landscape. 

Predicting which meme coins will experience an upward or downward movement is virtually impossible. However, the prevailing view is that meme coins are gaining a significant share of the gains, while fundamentally strong coins are experiencing comparatively smaller gains. These dynamics offer potentially favorable investment prospects for those willing to accept the higher risk of investing in meme coins.

In summary, investing in meme coins demands caution and thorough research. While some projects may hold potential for growth and community-driven value, others have fallen victim to scams or rapid depreciation. It’s vital for investors to stay informed about market trends and regulatory changes and to exercise prudent risk management practices. While meme coins offer speculative opportunities, readers are urged to approach cautiously, prioritize transparency, and practice diligence in their crypto investments.

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