What is a memecoin?
Coins built on jokes and attention, and why most of them end badly for late buyers.
A memecoin is a cryptocurrency inspired by an internet joke, meme, celebrity or trend, with little or no use beyond being bought and traded. Dogecoin, Shiba Inu and Pepe are the best-known. Their prices are driven almost entirely by attention and speculation, and most new memecoins lose nearly all their value.
Examples
- Dogecoin (DOGE), 2013: the original, with its own blockchain.
- Shiba Inu (SHIB), 2020: a token on Ethereum inspired by Dogecoin.
- Pepe (PEPE), 2023: a token named after the Pepe the Frog meme, openly describing itself as having no use.
- Thousands of short-lived tokens launched every day, especially on Solana and BNB Chain, including tokens tied to celebrities and politicians.
How new memecoins launch
Creating a token takes minutes and costs very little. On "launchpad" sites, anyone can create one with a name and picture; early buyers push the price up along a set curve, and if it gets enough buyers it moves to a regular exchange pool. The creator and the first buyers get in at the lowest prices.
How the math usually plays out
Imagine a new token where the creator and a few insiders hold 30% of the supply, bought for almost nothing. A viral post brings in buyers and the price rises 50 times in a day. Insiders sell into that demand. When new buying slows, there's no business or cash flow to support the price, so it falls back, often by 90% or more within days. The early sellers' profit is the late buyers' loss. That's the typical pattern, not a rare one.
Are memecoins legal?
Yes, buying and selling them is legal in the US. In February 2025 the SEC's staff said that typical memecoins, which give buyers no rights or claim on a business, generally aren't securities. That also means securities-law protections like disclosure rules don't apply. Fraud is still illegal, and other agencies can pursue it.
- Rug pulls: creators sell everything or pull the trading pool and disappear.
- Fake celebrity tokens: hacked or fake accounts "launch" a token in a famous name.
- Honeypots: tokens coded so you can buy but not sell.
- Paid promoters and "signal" groups that buy first and sell to their followers.
- Copycats: a token with the same name as a popular one but a different contract address.
If you're going to look at one anyway
- Only use money you'd be fine losing entirely.
- Check the contract address against the project's official channels and a block explorer.
- See how much supply the top wallets hold.
- Run the offer through the scam checker.
Frequently asked questions
Is Dogecoin a memecoin?
Yes, the first one, created in 2013 as a joke.
Can memecoins make you rich?
A few early buyers have made large gains, which is what keeps people interested. Most buyers, especially late ones, lose money. It's closer to a lottery than an investment.
Why are memecoin prices so low per coin?
They usually have huge supplies (trillions of tokens), so each one is worth a fraction of a cent. That says nothing about value; compare market caps.
Are memecoins securities?
SEC staff said in February 2025 that typical memecoins generally aren't. That isn't a court ruling, and fraud is still illegal.
What's the difference between a memecoin and an altcoin?
Every memecoin is an altcoin, but most altcoins aren't memecoins; many are networks or apps with an actual use.
Where to next
Sources
- Staff Statement on Meme Coins (SEC, February 27, 2025)
- What to know about cryptocurrency and scams (FTC)
- Pepe memecoin website hacked (Cointelegraph)
Written for beginners and checked against the sources listed. Last reviewed November 4, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.