Should You Buy That Meme Coin? Here’s What You Need to Know

If you’re familiar with cryptocurrency, you’ve probably seen meme coins like Dogecoin and PEPE. These coins started as internet jokes: no real utility (meaning they weren’t built to solve a problem) and no whitepapers (the documents that explain a crypto project’s purpose and plan), just hype and humor. You’d think that no one would put any money into them, right?

Well, you might be surprised that some exploded in value, turning meme lovers into millionaires. For instance, Dogecoin reached a peak market cap of $90 billion in 2021 after gaining traction through Elon Musk’s tweets. In 2023, PEPE Coin hit over $1 billion in just weeks. Other meme tokens also saw massive price jumps, fueled by community hype, social media buzz, and speculative trading.

However, thousands of others crashed, meaning not all meme coins follow the same success story; most never even come close to delivering the same explosive returns.

So here’s the big question: why do these meme-based coins go viral—and are they worth the risk?

If you want to know, read on as we cover the following:

What meme coins are and how they work
Why people buy them
What makes them risky to invest in

By the end, you’ll know if meme coins are a smart play, or just hype-driven tokens that crash as fast as they rise.

Meme coins in a nutshell

At their core, meme coins are cryptocurrencies built around internet culture: memes, jokes, or viral themes. Unlike most digital assets such as Bitcoin or Ethereum that are designed to solve problems or offer some kind of utility, memecoins thrive on attention. They’re not trying to reinvent finance; they’re trying to get noticed.

The original example is the aforementioned Dogecoin. It was launched in 2013 as a parody of Bitcoin, featuring the iconic Shiba Inu dog from the “Doge” meme and intentionally using Comic Sans for its logo. It had no roadmap, no long-term vision—just humor. But the joke caught on, as what started as satire quickly gained a cult following online.

That one project set the tone for everything that followed. Today’s memecoins still borrow that same mix of irony, branding, and community hype. Some mimic existing formats, others lean into absurdity. The one thing they all share? They’re not built to be serious; they’re built to go viral.

Most meme coins are created using standard templates called ERC-20 tokens, which are easy-to-make digital tokens built on top of Ethereum. Others are launched on chains like Binance Smart Chain, a popular alternative to Ethereum known for lower fees and faster transactions. These coins don’t need their own blockchain; just a basic smart contract (a bit of self-executing code that defines how the coin works), a catchy name, and meme-friendly visuals.

Once live, promotion moves fast. Creators push the coin through Telegram, Twitter, Reddit, and viral memes. If the coin gets enough traction, it might get listed on smaller marketplaces where users can trade it, and that’s usually when speculators start piling in, hoping to ride the next hype wave.

Why people buy meme coins

So if these coins are not necessarily useful, why do people invest in them? Here are a few reasons:

They’re fun and relatable: Meme coins use humor and pop culture that people already know, from dogs to frogs to absurd internet trends. That makes them feel light, non-intimidating, and social. Compared to technical crypto projects with dense whitepapers, meme coins feel more like joining an inside joke than making a financial bet.
They feed off hype and fear of missing out: When influencers or celebrities like the aforementioned Elon Musk mention a coin, the price often spikes; not because of fundamentals, but because thousands of people rush in at once. Trending coins create a snowball effect where people buy simply because everyone else is talking about it.
They feel low-risk because of the price: Meme coins are often priced at fractions of a cent, so buyers feel like they’re “getting in early,” even if the total market value is already massive. Spending $10 to get a million tokens feels like a steal, even if the odds of a big return are slim. That low entry point makes participation feel fun, easy, and low-stakes, even when it isn’t, necessarily.
Some now offer real utility: While most meme coins are just hype, a few added features to keep users engaged.

Shiba Inu launched ShibaSwap, its own trading platform. Users can stake SHIB to earn rewards or trade it for bonus tokens like LEASH and BONE. This gives people more reasons to hold SHIB instead of selling, which can help support its price and keep the project active.
Dogecoin is accepted by Tesla and other stores for payments. That gives it limited real-world use, which adds some credibility beyond the meme.

The risks of meme coins

While meme coins can seem fun and full of upside, they come with real risks, especially for new investors. Here’s what you need to watch out for:

Pump-and-dump schemes: Some coins are hyped to lure in buyers, only for insiders to sell at the top and crash the price. For example, SafeMoon surged in 2021 through influencer marketing, but later faced multiple lawsuits, including class actions against its founders and celebrity promoters. Court filings allege the team misrepresented locked liquidity, secretly withdrew millions, and manipulated the market, leading many to call it a pump-and-dump scheme in disguise.
Rug pulls: This happens when developers pull the liquidity or vanish with investor funds. A recent case was the Hawk Tuah coin, named after the meme girl from a recent viral video, launched in June 2024, then rugged within 24 hours, tanking 90% as creators deleted social accounts.
Extreme volatility: Meme coins can swing wildly in price based on jokes, trends, or a single tweet. PEPE’s value, for example, surged within its first week, driven purely by social media buzz, then dropped sharply once the hype faded. In short, you might face sudden losses with zero warning.
Regulatory uncertainty: Large coins like Bitcoin and Ethereum face scrutiny from governments, but meme coins are in a much shakier spot. Many are launched anonymously, with no legal structure or oversight. That makes them easy targets for fraud investigations or platform bans. If a meme coin gets flagged or delisted, you could be left holding a token you can’t sell.

Can you actually make money from meme coins?

Given all the risks, you might wonder if anyone actually makes money from meme coins.

The short answer: yes—but it's rare and depends almost entirely on timing.

Aside from Dogecoin and Shiba Inu, here are other cases that made headlines:

$Trump and $Melania: Launched in early 2025, these coins tied to Donald and Melania Trump quickly exploded in value. $Trump reached a $27 billion market cap within days. But both tokens crashed soon after, wiping out billions—a clear example of how fast meme coin hype can turn into major losses.
$Fartcoin: Despite having zero utility, $Fartcoin briefly hit a $2 billion valuation. It gained traction purely through meme value and speculation, then collapsed, showing how little substance meme coins need to skyrocket before crashing.
$CAR (Central African Republic): Touted as a “national meme coin,” $CAR launched in 2025 but lost 95% of its value within a day. It shows how even politically-backed meme coins can crash instantly if there’s no trust or structure behind them.

These examples show it’s possible to make money—but only a small number do. Most people jump in too late, after the hype has peaked.

Meme coins are speculative by nature. If you’re going to buy in, understand it’s a gamble, not a long-term investment strategy.

Final thoughts

Meme coins are built for attention, not stability. They rise on hype, crash on silence, and rarely offer long-term value. If you're buying in, treat it like entertainment: only use money you’re prepared to lose.

Before you do, take a closer look: Who created it? Is there a clear whitepaper? Does the community feel real or botted? If you’re going to take the risk, stick to the bigger, more established meme coins.

In short, approach meme coins with curiosity—not conviction.