Cryptocurrencies representing a euthanized gray squirrel, a small Thai hippopotamus and a cartoon dog have exploded in value since last month’s US presidential election, while Donald Trump’s victory sparked a wave of speculation about so-called memecoins.
The market for tokens that represent Internet viral moments has expanded rapidly since early November as traders bet that the Trump administration will introduce friendlier attitudes and regulation in Washington for crypto.
More established memecoins like Dogecoin have surpassed bitcoin, the world’s largest cryptocurrencyover the past month, joined by a slew of new coins launched in the days following Trump’s victory.
Critics, including some of the biggest figures in the crypto industry, argue that memecoins are little more than bubble assets that represent market exuberance and resemble craze for irreplaceable tokens — digital ownership certificates for digital artworks — during the 2021 crypto bubble.
“I’m not against memes. But coin memes are getting ‘little’ weird now,” Changpeng Zhao, founder of the crypto exchange Binancehe wrote on X last week.
There are millions of memecoins that can easily be set up using an online memecoin generator. They have no business model, cash flow or underlying value and do not give their owners a stake in any physical assets. Instead, these highly volatile tokens rely on their popularity among traders to generate liquidity.
“They have no value, they will never have value,” Charles Hoskinson, co-founder of the Cardano blockchain, recently said of memecoins. “There is no benefit behind them, no one wants them – when they lose their luster, they fall to nothing.”
All memecoins require a special knowledge of internet culture: MOO DENG refers to a Thai pygmy hippo that went viral for its playful energy; PNUT refers to an orphaned squirrel named Peanut who was euthanized by New York City authorities and whose death Trump was “pissed off,” according to Vice President-elect JD Vance; CHILLGUY presents a meme of a relaxed cartoon dog with his hands in his pockets going viral on TikTok.
CHILLGUY’s total market value has reached $466 million since it was created two weeks ago. It got a boost when MrBeast, the world’s most popular YouTuber, wrote on X last week that it was “the biggest meme of our lifetime”.
The memecoin craze has inspired others to get involved. Haliey Welch, who went viral this year as the Hawk Tuah Girl, said last week that she would soon launch the token “to unite her whole community.”
PNUT’s market cap has reached $1.2 billion, while PEPE, which refers to the comic frog character, has a market capitalization of $8.2 billion — more than the market value of British supermarket chain Sainsbury’s. BONK, a cartoon dog created after the collapse of the FTX exchange in an attempt to cheer up traders using the Solana blockchain, has a market cap of $3 billion.
Traders are excited by the election of Trump and the prominent position secured by billionaire backer Elon Musk, who frequently posts and reacts to popular memes on his X social media platform.
Trump has appointed the world’s richest man to lead the new US Department of Government Efficiency. Its name is a nod to Dogecoin, which was originally created as a satire of the industry in 2013. It was considered the world’s first memecoin, and is Musk’s favorite.
Since the election, Dogecoin has jumped about 140 percent, giving it a value of roughly $60 billion — more than the value of U.S. retailer Target or Swiss miner and commodities trader Glencore.
“Ninety-nine percent of them (memecoins) are pump and dumps,” said Ilan Solot, one of the heads of digital assets at Marex Solutions. “They are a very, very specific game. . . The game is to get in and get out before others get out,” he added.
Anyone can start a meme coin.
Creators usually choose a blockchain on which to build a token, while online memecoin generators help users create coins without the need for coding skills. Creators themselves can decide the token supply and how much they want to keep, and then list the coin online on decentralized or centralized exchanges. Building hype and interest helps drive up the price of memecoins, allowing early owners to cash out when prices spike. But 89 percent have a market value of less than $1,000, according to a report by BDC Consulting.
“Most of them fail and have no liquidity,” said Adam Morgan McCarthy, a research analyst at Kaik. But “these things are like Lazarus if the community stands strongly behind them”.
Crypto exchanges are rushing to take advantage of the trend. Gemini, Kraken, and Binance are among the places that quickly list new tokens and trading pairs, making it possible to trade one token against another.
“It’s an interesting trend that we shouldn’t just dismiss as ‘oh, it’s speculation,'” said Hong Fang, president of crypto exchange OKX. “It’s all about attention and how much people believe in certain things and this is reflected in the market, in the price, for the first time.”
But others see parallels with the speculative frenzy a little earlier the collapse of the NFT market in 2022
“It’s gotten a little silly and it seems . . . like what happened towards the end of the NFT market,” said Geoff Kendrick, global head of digital asset research at Standard Chartered.
“At some point something will happen that will free the house of cards and it will collapse.”
