What are meme coins? Explained

Would you invest in something that started as a joke?

That’s exactly what millions have done — pouring billions into meme coins, a quirky corner of crypto that has evolved from internet punchlines into market disruptors. But are meme coins smart bets, digital pranks, or something else entirely?

Let’s break it down.

What exactly is a meme coin?

A meme coin is a cryptocurrency inspired by internet culture, jokes, or viral trends. Unlike Bitcoin or Ethereum, which were designed to solve major financial or technical problems, meme coins usually launch with little to no utility. They’re not trying to reinvent money — they’re often just trying to go viral.

Related: What is Crypto? Cryptocurrency explained

Dogecoin is the poster child of this trend. Created in 2013 to parody the crypto boom, Dogecoin featured a Shiba Inu dog from a popular meme. But what started as satire exploded into something far more real, with Dogecoin eventually hitting a $90 billion market cap — all thanks to internet momentum and some high-profile tweets from Elon Musk.

Then came the imitators. Shiba Inu, dubbed the “Doge killer,” made waves in 2020. It briefly cracked the top 10 cryptocurrencies by market cap. After that, the floodgates opened — with coins like Pepe, Floki, and Dogelon Mars entering the fray.

Meme coins: not all created equal

Broadly, meme coins fall into two camps.

First, there are non-utility meme coins — tokens that thrive purely on community hype and speculation. Dogecoin and Shiba Inu are great examples. There’s no major product behind them, but they’ve built cult-like followings.

Join the discussion with Scott Melker on Roundtable here.

Then there are utility meme coins, which start with memes but evolve into actual projects. Floki is one of the most notable. It’s developing a metaverse game called Valhalla, a crypto education hub called Floki University, and tools for NFTs and DeFi.

Why do meme coins matter?

They may sound silly, but meme coins play a surprising role in crypto’s growth.

For starters, they’re onboarding tools. According to Gemini, many people buy meme coins before touching Bitcoin or Ethereum. In the U.S., 31% of crypto users who own both started with meme coins. Globally, 94% of meme coin holders also own other crypto — proving these tokens are often a gateway.

Second, they demonstrate community power. Meme coins don’t need VCs or Wall Street. They thrive on Twitter threads, Reddit memes, and group chats. That’s a powerful — and sometimes dangerous — force.

Join the discussion with CryptosRUs on Roundtable here.

Third, they test the boundaries of crypto. Meme coins are chaotic, decentralized, and culture-driven — stretching what digital assets can represent.

But there’s a dark side

It’s not all fun and gains. Meme coins are high-risk, high-volatility, and often rife with scams. Most of them crash. Some never even launch. Rug pulls are common. If you're getting in, get in with eyes wide open.

So, are meme coins a joke?

Yes — and also a phenomenon reshaping how a generation thinks about money, memes, and markets.