What is a memecoin?
In one line: A memecoin is a crypto token built around a joke, meme or online trend, with little or no use, whose price runs on attention and hype.
The idea in plain words
Most crypto projects at least claim to do something: payments, apps, a network. A memecoin doesn't. It's a Token built on a picture, a joke or a trend. Its price moves on attention: posts, influencers, group chats.
The first famous one is Dogecoin, made in 2013 as a joke about the "doge" dog meme. Since then, many thousands have launched, especially on Solana. Launchpads like pump.fun, which started in January 2024, let anyone create one in minutes. See what is pump.fun.
How a launch usually goes
- Someone creates a token and a small Liquidity pool or launchpad listing.
- Insiders, the creator's friends, and fast bots ("snipers") buy in the first seconds.
- Posts spread. Later buyers push the price up.
- Early holders sell into that buying. The price drops, often by most of its value.
Some tokens are outright scams, a Rug pull or Pump and dump. But even honest ones usually follow this curve.
A simple example
A token launches at a tiny price. A few hours later it's up 50 times, and screenshots fly around. By the time most people hear about it, the people who bought first are selling to them.
The posts show the winners. The thousands of tokens that went to near zero don't get posted. That's survivorship bias.
A common mistake
Thinking you're early. If you saw it on social media, insiders and bots were almost certainly in before you. Most new memecoins lose nearly all their value.
We don't suggest buying memecoins. If you look at them at all, use only money you can afford to lose entirely, sized from your risk rules, with a plan for how you'll get out.
Our position size calculator keeps any trade tied to a fixed risk. More in memecoins explained.
Questions
Are memecoins a good investment?
They're among the riskiest things in crypto. Prices run on hype, and most new ones lose nearly all their value.
Why do memecoins go up so fast?
Small pools and lots of attention. A little buying moves the price a lot. The same works in reverse on the way down.
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