Just three days before his presidential inauguration, Donald Trump made a surprising move: he launched $Trump,a cryptocurrency tied to internet jokes, known as a memecoin. Supporters and investors rushed to buy it, hoping its value would rise. Initially,Trump skyrocketed from 7 to 75 in a single day. However, its price soon dropped to around $40. Around the same time, Melania Trump and even the pastor at Trump’s inauguration ceremony created their own meme coins, jumping on the trend.

What Are Meme Coins?

Meme coins are cryptocurrencies inspired by internet jokes or viral trends. The most famous example is Dogecoin, created in 2013 as a joke based on a popular meme of a Shiba Inu dog. Unlike Dogecoin, which runs on its own blockchain (a decentralized digital ledger), most new meme coins are tokens. This means they are built on existing blockchains, like Ethereum or Solana, making them cheap and easy to create.

Why Do People Invest in Meme Coins?

The main reason is speculation. Buyers hope to get rich quickly if the coin’s value rises. However, experts warn that most meme coins fail. They are highly volatile and often tied to scams like “pump and dump” schemes. In these scams, creators promote a coin to inflate its price, then sell their own holdings, causing the value to crash. “It’s like a game where ordinary people always lose,” says Carol Alexander, a finance professor.

Why Are Meme Coins Booming Now?

Several factors explain their recent popularity:

1. Platforms like pump.fun allow anyone to create a meme coin in minutes.

2. Politicians like Trump, who supports cryptocurrency, have inspired more interest.

3. Many young people, frustrated with traditional paths to wealth, see meme coins as a “quick fix.”

Examples of Meme Coins

- Dogecoin: The original meme coin, still popular despite its joke origins.

- Pepe: Based on a controversial frog cartoon meme.

- $Hawk: Launched by a woman from a viral video, it lost 95% of its value within days.

Are Meme Coins Like Bitcoin?

No. Bitcoin was designed as an alternative to traditional money. Meme coins, however, are mostly used for speculation. Early Bitcoin developer Mike Hearn calls them “gambling tools with no real purpose.”

A Bizarre Story: AI, Goatse, and FartcoinNew Zealand artist Andy Ayrey created an AI bot named Truth Terminal that began promoting meme coins on social media. A stranger then created Goatse, a coin inspired by an offensive internet meme, and sent it to the bot. Truth Terminal promoted the coin, and its market value briefly hit $1.2 billion. Later, the bot championed Fartcoin, which reached $2.3 billion. However, Ayrey struggled to sell the coins. Their value collapsed when he tried, as few buyers existed.

Who Actually Profits?

According to experts, the winners are large trading firms using risky strategies banned in traditional markets. “Ordinary investors usually lose money,” says Alexander.

Trump’s Meme Coin: More Than a Joke?

Trump’s $Trump coin has drawn criticism because his company earns fees from trades. While some buy it to show political support, experts believe Trump’s goal is simpler: “He wants to prove he can break rules and still succeed” says Alexander.