Memecoins: the playful side of cryptocurrency

Memecoins have grabbed plenty of crypto news headlines in 2024, and outperformed every other coin category in the crypto space. Memecoins aren't new. In fact, Dogecoin (DOGE), the oldest memecoin, has been around since 2013 — predating Ethereum’s launch date. 

However, the token category has taken on a new life in recent years. According to a recent report, the market cap of memecoins grew by a whopping 1,313% in Q1 of 2024.

The success of the category has given rise to new memecoins, while high-profile tokens such as Shiba Inu, dogwifhat, and Pepe see significant trading volume every day. 

While memecoins are seen as just a joke by some, no one can deny the traction behind them. The community many memecoins build is a major driving force behind their longevity. And, some have evolved beyond their memecoin status. For example, Dogecoin and Shiba Inu have focused on charitable efforts and blockchain adoption with the help of their community. While some are here to capitalize on the gains, most memecoins exist to entertain and have fun with their communities.

Read on to explore more about these light-hearted crypto assets.

TL:DR

• Cryptocurrencies based on internet memes and jokes are known as memecoins

• They typically have no value or utility and are primarily for entertainment

• They have certain attributes that are comparable to Bitcoin and Tether

• Their prices can skyrocket, but they're also prone to sharp declines

• Traders should exercise caution when dealing with memecoins because of their instability

Understanding memecoins

Memecoins are digital currencies that draw inspiration from trending internet memes or jokes. They often adopt the names and symbols of these memes. For instance, Dogecoin, the most prominent memecoin with a market cap of $9.38 billion as of November 2023, was launched in 2013.

It humorously acknowledged the speculative nature of early cryptocurrencies and was inspired by the 'doge' meme, featuring the Shiba Inu dog. Another popular memecoin, PEPE coin, pays tribute to the Pepe the Frog meme, which has existed since 2005. Driven by social media buzz and hype, memecoins are seen as fun alternatives to more serious cryptocurrencies. They typically lack intrinsic value and utility.

The technical aspect of memecoins

While memecoins might seem whimsical, their technical foundation is solid. They often utilize blockchain technology, similar to established coins like Bitcoin. Many also incorporate smart contracts from platforms like Solana and Ethereum. For instance, Dogecoin initially used Litecoin's infrastructure before transitioning to Bitcoin's. A notable distinction is that memecoins might have an unlimited or vast supply, leading to lower unit prices.

Why the hype around memecoins?

Several reasons drive people to trade memecoins:

• Entertainment and novelty

• A sense of community around the coin

• Fear of missing out on potential price rises

• Portfolio diversification

Despite their playful nature, some memecoins have yielded significant returns for traders who've strategically timed their trades.

Which memecoins are popular?

Due to the high level of fluctuation, this is a difficult question to answer. Nevertheless, the following memecoins are particularly noteworthy.

WSM

This memecoin seeks to use humorous memes to poke fun at Wall Street and the traditional financial system. As of the time of writing, WSM market cap sits at over $40 million.

PEPE

Kermit the frog with his cup of tea has been knocked off his meme throne thanks to the internet's favorite frog, Pepe. As of writing, the PEPE coin market cap is $464.84 million.

Shiba Inu (SHIB)

Did you know, upon receiving half of the SHIB coin distribution, Vitalik Buterin destroyed a considerable amount of it and gave another large chunk to the India Covid Relief Fund. As of November 2023, SHIB's market cap sits at $4.51 million.

DOGE

It's no secret that DOGE is one of Elon Musk's favorite memecoins. So much so, before Twitter rebranded as X, the DOGECOIN logo replaced Larry the Bird. As we mentioned earlier, DOGE's market cap stands at $9.38 billion at the time of writing.

MEME

As the latest meme token to make waves in the memecoin space, Memecoin has zipped up the market cap rankings to reach a total of $1.74 million. Thanks to its ties to Memeland, the Web3 venture studio of 9GAG fame, MEME has attracted both crypto beginners and veterans as they go down the Memeland ecosystem rabbit hole.

WIF

The dogwifhat project team admits unashamedly it's just a "dog wif hat." But when it comes to memecoins, dogs-themed projects do have a history of success. Like many others, dogwifhat is a part of the Solana memecoin ecosystem. It only launched in late 2023 but already sits fourth highest among all memecoins by market cap at the time of writing.

The project's website has teased about a hat generator, which could mean there's a chance for you to generate your favorite hat on the dog.

How to trade memecoins?

Like other cryptocurrencies, memecoins can be traded on various exchanges. Platforms like OKX list popular memecoins such as DOGE, SHIB, PEPE, WSM, and MEME, allowing traders to diversify their portfolios. Read on to understand the different ways you can trade memecoins on okx.com and the OKX app.

Buying memecoins on OKX.com 

For this example, let's look at buying Dogecoin (DOGE) on OKX.com. 

Step 1: Create an account on OKX and verify your identity.

Step 2: Once verified, head to ‘Buy crypto’ in the top-left corner and select ‘Express buy’. Other options for buying tokens are also found here.

Step 3: First, select the currency you want to buy with and then type ‘DOGE’ into the field below. 

Step 4: Next, insert the amount you want to pay. The ‘receive’ field will be calculated automatically, showing how much DOGE you’ll purchase. For example, if you type 100 EUR, the amount of DOGE is automatically calculated based on current prices. 

Step 5: Select the ‘Buy DOGE’ button. 

Step 6: Choose a convenient payment method and follow the instructions. 

Step 7: Once the payment is confirmed, the DOGE tokens will arrive in your account. 

Buying memecoins on the OKX mobile app

The OKX mobile app offers a convenient option to buy memecoins on the go. Let's walk through how to buy Shiba Inu (SHIB) on the OKX mobile app. 

Step 1: Download the OKX mobile app for iOS or Android, depending on your device. 

Step 2: Sign in to your OKX account. If you don’t already have an account, sign up and complete the verification process. 

Step 3: From the home screen, select the menu from the top-left corner and choose ‘Buy’ under ‘Manage assets.’

Step 4: Type ‘SHIB’ in the search bar and select Shiba Inu. 

Step 5: Type the amount of SHIB you want to buy and choose ‘Select payment method.’

Step 6: Choose a payment method of your choice and follow the instructions. 

Step 7: Once the payment is confirmed, the SHIB tokens will arrive in your account which you can also access from the OKX mobile app‌. 

Trading memecoins on OKX futures market

The OKX futures market is another option to trade memecoins. The OKX perpetual futures market offers up to 100x leverage with access to bots and advanced order types. Let's look at trading PEPE on OKX futures. 

Step 1: Create an account on OKX and verify.

Step 2: Head over to ‘Trade’ in the top menu bar and select ‘Futures.’

Step 3: Select the ticker in the top-left and type ‘PEPE.’ Select ‘PEPEUSDT’ under futures. 

Step 4: To trade, first select the leverage under ‘Trade’ and set the amount of leverage you want to use. For PEPE, OKX offers up to 50x leverage for both long and short orders.

Step 5: Type the price, the amount of PEPE, and either select ‘Long’ or ‘Short’. Select ‘Market order’ if you want to execute your order instantly at the current market price. 

Step 6: Once your order is filled, you'll now have an open trade. 

Step 7: Setting a ‘stop loss’ and ‘take profit’ trigger once PEPE reaches your desired price is recommended. 

The final word

Memecoins are unique to the crypto market. Most started out as a joke without any inherent value to them. However, some have evolved beyond their meme status with the help of their community, driven by community support and social media buzz. 

Memecoins offer a unique opportunity for newcomers to understand the mechanics of crypto and trading in an entertaining way. However, it’s important to keep in mind that all crypto is inherently volatile — especially memecoins. That’s why we always recommend you do your own research before opening a position.