The Rise (and Fall) of Memecoins PEPE, WOJAK & Co.
Memecoin season seems back in full swing. While these tokens started as a joke, trading these coins is certainly not a harmless gamble.
Memecoin season is back in full swing. While these tokens started as a joke, trading these coins is definitely not a harmless gamble.
A new memecoin trend making the rounds is inspired by the rapid rise of the frog meme PEPE. While the "established" memecoins like Dogecoin and Shiba Inu remain popular, cryptocurrencies like WOJAK, ARBDOGE, REKT, or STONKS are getting more popular. They're driven by stories of huge profits, ridiculous price tags, and a devoted fan community. The crazier, the better it seems to be.
Memecoins: Are they all just Ponzi schemes?
The crypto space has an answer to almost every internet or real-world phenomenon in the form of a token. With crypto, you can tokenize the latest trend and assign it value. Memecoins make the complex sector approachable and fun again, at least for a few investors. Because while nobody wants to spoil the game, these joke-tokens are also full of traps that many newcomers don’t understand. Since the wild bull-market days of 2021, that hasn’t changed.
Publishers are often unknown and themselves hold a large share of the tokens. When they or early investors sell, the price drops significantly. So-called "pump-and-dumps" are therefore inevitable. It also gets dangerous when users connect their wallets to shady sites to receive so-called "Memecoin airdrops". It’s not surprising that there have been cases where wallets were looted through these swindles. As a result, many of these tokens will soon disappear from the scene and take the crypto hopes of many casual investors who hoped to make quick money with these fun tokens.
Is the investment worth it?
Memecoins feel like a wild digital game of musical chairs. If you join too late, you usually lose. These tokens grab attention with insane profit promises, which in reality are mostly realized by insiders. This was true with PEPE, where a "lucky" meme trader reportedly made several million US dollars on an investment of just $25. However, it's unlikely he’ll actually realize that amount given the token’s very illiquid market and the risk of a price crash. So a memecoin can be a one-way street even for supposed "winners".
The memecoin hype is spreading even faster too. PEPE and other memecoins are only a few weeks old. So anyone jumping in now might think they’re relatively "early." But PEPE’s 500x price surge lasted only a few days. It’s possible these and other hype cycles have already captured most of their gains by the time the crypto crowd catches wind.
And yet, since Dogecoin and Shiba Inu, it’s clear that reason here doesn’t have much sway. The joke coins are now just as much a part of crypto as Bitcoin and Ethereum. Regardless of public opinion, they form a clear boundary in the industry between what counts as a "serious" investment and what’s simply gambling. As long as prices rise, everyone is having fun. The staying power of these cryptos can be easy to underestimate. From a safe distance and without putting in their own money, each memecoin price carries a certain entertainment value. Who can really know if it’s just getting started or already over?
