Internet memes have been around for a long time, and most people have come across them over the course of their internet journey. Be it the mischievous grin of the Trollface character, Chuck Norris memes, or the contemplating dinosaur accompanied by deep philosophical quotes.
A meme is defined as an idea, image, video etc. that is spread very quickly on the internet, typically humorous in nature and often copied by internet users with slight variations. Some would say that a meme is an idea that rips through the public consciousness or describe it as a piece of media that is repurposed to deliver a cultural, social, or political expression, often through humor. In the Bitcoin Suisse Global Crypto Taxonomy, we define memecoins as culture assets that center around a meme or popular cultural movement and are often of volatile and speculative nature. And we highlight that memecoins are usually created for fun and are more driven by social media trends and community sentiment than financial fundamentals.
Someone outside of the digital asset market might be wondering, why is Bitcoin Suisse publishing an article on memecoins? But, of course, crypto natives are aware. Memecoins have taken over the crypto world by storm, and given their mindshare and performance, it’s hard to ignore them. But how did we end up here? Wasn’t the original idea of crypto to change the world for the better? Decentralize the financial institutions and give everyone access to a fairer and more secure financial system? And now we are talking about memes?
Even though memes have existed for a long time - way before Bitcoin was created - it took some time for the first memecoin to emerge. It should come as no surprise that Dogecoin was the world’s first memecoin. Billy Marcus and Jackson Palmer created Dogecoin in 2013. The two were both software engineers, and Palmer actually based Dogecoin on the already existing and quite popular “Doge” Shiba Inu meme. Palmer tweeted his idea out as a joke, which then turned into reality when Marcus saw the Tweet and started building Dogecoin. Markus created Dogecoin in a matter of three hours, copying core chunks of Bitcoin, Litecoin and Lucky Coin’s source code; Lucky Coin was a fork of Litecoin and Litecoin itself a fork of Bitcoin. So essentially, Dogecoin originated from Bitcoin, at least indirectly.
While Dogecoin was intentionally created as a joke, the memecoin gained traction in the early crypto community during 2013 and 2014. In 2013, following Bitcoin’s first halving in November 2012, Bitcoin experienced its “first” bull cycle, going from $10 in November 2012 to over $1’100 in November 2013 before then entering a bear cycle where Bitcoin traded back down minus 85% until January 2015, bottoming at around $150. Now, take a guess as to when exactly during the year of 2013 Dogecoin was launched. Or to be more specific, at what stage of the first bull cycle? Yes, you got it. Exactly at the top of the first bull market in December 2013, just days after Bitcoin traded above $1’000 for the first time.
One could argue that the creation of Dogecoin was a product of the euphoria of early Bitcoin market participants, specifically Billy Marcus and Jackson Palmer, who were high on endorphins, celebrating the success of Bitcoin, and creating a memecoin for fun. Even though Bitcoin traded to the downside in the months following Dogecoin’s inception, Dogecoin.com attracted millions of visitors within a month, and Dogecoin gained traction really quickly. When looking at the price action of DOGE in the early days, we can see that it saw an initial pump of over 1’000% in January 2014 before correcting more than 95% over the course of three years. Marcus and Palmer both stepped away from the Dogecoin project during this time: Marcus famously sold all his Dogecoins in 2015, which at the time were valued at a couple of thousand U.S. dollars. Despite Marcus and Palmer leaving the project, DOGE continued to evolve through different use cases, such as online tipping or online fundraising campaigns organized by the early Dogecoin community.
The chart above illustrates the price action for DOGE over the years up until the end of 2020. After the above-mentioned bear market of 2014 and 2015, where Dogecoin lost more than 95% of its value, alongside most other crypto assets, it experienced a big uprising in the bull market of 2017, but yet again, this was nothing out of the ordinary, as many altcoins managed to pump to new highs, some of them up thousands of percent, just like DOGE, which put in a new all-time high in January 2018. Dogecoin was no exception during the bear market of 2018 and 2019 and corrected more than 90% to finally bottom during the COVID-19 crash in March 2020. What came thereafter, during the early days of 2021, would change the whole memecoin saga forever. But first…
Were there any other memecoins during the pre-2021 era? Not really, but the emergence of NFTs on Ethereum fits into the meme category. For example, the Rare Pepe in March 2017, CryptoKitties in November 2017 and EtherRocks, which were launched during the year 2017 as well. The Unisocks (SOCKS) of 2019 might be one of the few actual memecoins prior to 2020, when Shiba Inu (SHIB) joined Dogecoin in the realm of “dog memecoins”.
Shiba Inu (SHIB), is a memecoin that was launched in August 2020 by an anonymous person known as Ryoshi. Fun fact: Kabosu, the dog behind the original meme on which Dogecoin was based, is a Shiba Inu, which is a Japanese dog breed. SHIB made the news when its founder sent 50% of the token’s supply to Vitalik Buterin, who then burned 90% of said SHIB tokens and sent the remaining tokens to an Indian COVID-19 relief fund.
Even though Elon tweeted about Dogecoin for the first time during the spring of 2019 and then during the summer of 2020 as well, things really took off in the beginning of 2021.
Dogecoin pumped over 1’000% in a matter of days after Elon’s tweet on January 28, 2021. Over the course of a couple of months, Elon continued to tweet about Dogecoin (and Bitcoin), for example on February 4, 2021, a tweet with the picture seen below, or on April 1, 2021, when he tweeted that “SpaceX is going to put a literal Dogecoin on the literal moon”. Another historical tweet is his announcement that he will be joining the Saturday Night Live show on TV on May 8, 2021.
The Saturday Night Live show then ironically marked the multi-year all-time high for DOGE at $0.73, up more than 65’000% from its COVID-19 low, a beyond-remarkable performance. Even the performance during the first 5 months of 2021 was extraordinary: For every $1’000 invested into DOGE on January 1, 2021, one could have earned a profit of $160’000 on May 8, 2021.
In January 2021, not only memecoins were making headlines, but the whole world was talking about meme stocks, in particular GameStop (GME). GameStop, a video game retailer, appeared to be struggling because of the pandemic, making it a popular play among short sellers. In December 2020, the stock of GameStop was trading around $4, this quickly changed during January 2021, when GME surged to $120 (split-adjusted), a rise of almost 3’000% in a month. The surge was led by a group of individual investors, many of whom hung out on the subreddit r/WallStreetBets, following the now famous Keith Gill, better known as Roaring Kitty. GameStop (GME) was not the only meme stock experiencing extraordinary gains, the r/WallStreetBets traders also traded AMC, BlackBerry or Express. And, you guessed it, Elon Musk also played his part in the saga, as seen in this tweet, published on 27 January 2021, one day before the all-time high of GME. GME then went on to lose over 90% of its value in a matter of two weeks.
Whereas at the end of the 2021 bull run, the only three memecoins in the top 100 coins by market capitalization were DOGE, SHIB, and ELON, NFTs really took off during the year 2021 and well into 2022. In the chart below, the weekly trade volume of NFTs by chain is shown. NFTs could be seen as a memecoin with a picture, and, going back to the definition of a meme, might even better fit its original definition.
Popular NFTs of the 2021 bull run are the CryptoPunks, Bored Apes or Pudgy Penguins. The total trading volume for NFTs reached highs of $17.6 billion for the year 2021, an increase of more than 21’000% when compared to the year 2020. An NFT by Beeple sold for a record $69 million at a Christie’s auction in the spring of 2021.
While only three memecoins established themselves in the top 100 coins by market capitalization, there were many cases of exceptional performances during the last bull run, and by the end of 2021, there were already hundreds, if not thousands, of memecoins in circulation. Retail investors from all over the world have heard of memecoins, know some of the memecoins, and see them as a chance to make a lot of money fast. Memes have become the hot topic and have captured a lot of the total market cap, social media activity, volume and liquidity, as was also highlighted in our Bitcoin Suisse Industry Rollup report in May 2024. So why are memecoins popular with retail investors? We have highlighted some of the reasons in the report: humans are generally attracted to memes, and "get-rich-quick-possibilities" memecoins could be viewed as lottery tickets, where you only need to get it right once to make it big. But there are other, more reasonable, and more comprehensible arguments for memecoins, especially their fair launch and broad distribution dynamics.
Memecoins have been at the center of attention during the last 18 months and have played a pivotal role during this bull market cycle, with hundreds of thousands of new memecoins entering the space and some of them making historic price performances over the last year and a half. While most of the memecoins during the year 2023 did not manage to enter the top 100 coins by market capitalization, there were signs of a development of capital in the direction of memecoins, with BONK entering the top 100 and PEPE being only three spots shy of the one hundred coins with the biggest market capitalization at the end of 2023. PEPE and BONK were both launched in 2023, alongside many other memecoins like WIF, LADYS or MYRO.
An important sign of legitimacy of the memecoin sector are various indices, launched by financial giants like VanEck or crypto native companies such as The Block. The GMCI Meme Index by The Block aims to track the price development of the leading memecoins by market capitalization, among them DOGE, SHIB, PEPE, WIF and BONK. The index adheres to a monthly rebalancing schedule and focuses on memecoins that have not only captured the imagination of the digital world but have also demonstrated significant community engagement and market presence. The chart below shows how the memecoin sector has experienced a surge in recent months, especially from the end of March until mid-April 2024 during the time when Bitcoin achieved its new all-time high above $70’000.
Currently, there are a million new crypto tokens created every month. This number has really spiked to the upside over the last few months and memecoins have played a crucial role in this. Solana, Base and Ethereum are among the blockchains with the most newly issued tokens over the last two months, with Solana in the number one spot, seeing nearly half a million tokens issued during the month of May.
The majority of the new tokens are memecoins, which are trying to capitalize on the hype surrounding memecoins on Solana after the success stories of WIF and BONK. A large part of the amount of newly issued tokens on Solana can be attributed to Pump.fun, a platform for creating tokens with just a few clicks. Is this how the mainstream and retail investors return to the world of digital assets? This spring, celebrities such as Caitlyn Jenner and Iggy Azalea have launched their own tokens on Solana, indicating some interest in digital assets from the mainstream side. Additionally, Roaring Kitty’s return to the public has sparked hopes of memecoin and meme stock investors from all over the world. Roaring Kitty, also known as DeepFuckingValue, posted on X again on 12 May 2024, for the first time since 2021. The share price of Gamestop (GME) increased by over 500% following his tweets and was trading above $60 again in May. Roaring Kitty continued to be active online during May and June, revealing a position of over $200 million in GME on June 2. His appearance on a livestream on June 7, where over 500’000 viewers showed up, led, on the one hand, to a 25% decrease in the price of GME, but also showed the immense public interest in meme stocks and potentially memecoins. It remains to be seen how this memecoin and meme stock saga of 2024 will further develop; the ingredients for an interesting development are around.
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