Memecoins: What They Are and Why It's a Casino, Not an Investment

Strip away the memes and the hype and a memecoin has no product and no value underneath, only a price held up by jokes and an active community. You can earn on them, but it is closer to a bet in a casino than to an investment: the price lives on the crowd's emotion, not on anything real. So most participants end up losing, while the winners are mostly those who launched the coin and exited first.

Memecoins promise multiples over a weekend and gather crowds of beginners on the wave of the next bout of hype. I trade by volume and the Wyckoff method, and memecoins do not fit that picture at all: there is no normal liquidity here and no honest volume, just emotion and manipulation. Let me lay it out soberly: what a memecoin is, why it is a casino, and how to treat it if resisting really is beyond you.

In this article we'll cover:

• a memecoin is a coin with no product and no value, whose price rests only on hype and a community;
• you can earn, but it is a bet in a casino: a few win, the majority lose;
• in my experience the method does not work here: low liquidity and manipulation make volume useless;
• if you really must, play only with money you can afford to lose in full.

Start with what a memecoin even is in simple terms.

What a memecoin is in simple terms

A Memecoin is a cryptocurrency with no real product, technology or usefulness, whose value rests solely on internet hype, memes and the enthusiasm of a community. Put more plainly, it is a joke coin whose price depends only on how many people believe in it right now.

The genre arrived almost as a parody. The first memecoins like Dogecoin were created with a dog theme for a laugh, with no serious idea behind them, and then hundreds of imitators followed, the likes of Shiba Inu and countless nameless tokens. The key difference between a memecoin and an ordinary cryptocurrency is that there is nothing behind it: no working product, no technology it solves, no clear team with goals. There is only a picture, a social-media frenzy and a promise of quick riches. What actually stands behind normal cryptocurrencies I break down in the piece on the basics of cryptocurrency.

In short: A memecoin is a coin with no product and no technology: the price rests only on hype, memes and the crowd's belief, and depends only on how many people believe in it right now.

Why memecoins are a casino: hype, liquidity and manipulation

Strip the price of anything real and what is left answers only to emotion, which is precisely why the casino label fits. Fear of missing out and greed move it. Today the coin flew up a thousand percent on a wave of hype, tomorrow it collapsed once the wave passed. This is not an investment in an asset but a bet on whether you can jump out before everyone else.

Worse still, memecoins are a field for outright manipulation, and there it is no longer luck but schemes. A pump-and-dump works like this: a group artificially runs up the price of a low-liquidity coin through social media and chats, creates a frenzy, then dumps it at the peak, leaving beginners with losses. At bottom such a scheme simply moves money from late participants to early ones. A rug pull is more dangerous still: the coin's creators gather money into a liquidity pool, inflate the hype, then suddenly withdraw all the liquidity and vanish, crashing the price to zero. In a single recent year alone the speculative memecoin segment lost tens of billions of dollars, and on certain hyped tokens hundreds of thousands of wallets were left deep in the red. Low liquidity is the root of the evil here: it is exactly what lets a large player move the price easily and manipulate the crowd. The dangers of the crypto market I cover in detail in the piece on the risks of cryptocurrency, and the emotions all of it rests on in the course section on fear and greed.

This casino also has outright fraud worth knowing well. The most common is the rug pull: the creators pump a coin, seed liquidity, catch a crowd on the hype, then yank all the liquidity at once and vanish, leaving people with a token they cannot sell at any price. Next to it stands the insider problem: the bulk of the coins is often bought up by the team and snipers in the first seconds, and while retail buys into the rise, those wallets calmly unload into their hands. So I treat a memecoin not as an investment but as a lottery with rigged odds: you should only go in with money you can afford to lose entirely.

A launchpad is a platform where anyone can mint their own token in minutes for a couple of dollars and without a single line of code; the best known, Pump.fun on Solana, had spun up millions of coins by 2025, with thousands more appearing every day. The opening price is set not by the market but by a bonding curve: the more that is bought, the dearer the next purchase, and the earliest buyers sit right at the base of that curve. To me this is the structural proof that a memecoin is not an asset but a bet: the supply of tokens is effectively endless, so what competes is attention and speed, not value. Liquidity on a fresh coin is thin, just enough for the creator and a handful of early wallets to walk away in profit at the expense of latecomers; that is how a shallow book turns an ordinary purchase into a pump-and-dump, and often into an outright rug pull. So I read no launchpad coin on the chart and volume as a normal instrument: the mass of participants whose footprint I look for simply is not there.

In short: A memecoin's price moves on the crowd's fear and greed; pump-and-dump and rug pull move money from late to early participants, and low liquidity lets a whale move the price easily.

Why memecoins moon and then collapse: supply, celebrities and attention

Part of the answer sits in the supply. Where Bitcoin is capped, most memecoins ship with an enormous or even uncapped supply, billions or trillions of units, so there is nothing scarce holding the price up. Dogecoin, for instance, mints new coins endlessly; others launch with quadrillions and only later bolt on a burn to fake scarcity. A vast float keeps the price per coin tiny, which feels cheap and pulls beginners in, while that same float makes any lasting rise an uphill fight. So the low unit price that looks like an opportunity is usually just a very large number of near-worthless units.

The rest is pure attention. A memecoin has no earnings and nothing to value, so its price is little more than a live count of how loudly people are talking about it. That is why one post from a well-known name can double a coin in an hour and another can halve it just as fast, and Dogecoin's whole history is a string of such swings driven by a single celebrity. Because attention always moves on, the arithmetic is brutal: a couple of names hold the overwhelming share of the entire memecoin market, while the thousands launched every week fade to nothing the moment their trend cools. Daily swings of fifty to ninety percent are normal here, not a glitch. Whoever buys once a coin is already trending is, almost by definition, buying that attention at its peak.

In short: Most memecoins carry a huge or uncapped supply, so there is no scarcity; the price is just a live measure of attention, swung by celebrities and prone to 50-90% daily moves, and the vast majority fade to nothing once the hype passes.

How to treat memecoins soberly

My method is the reason I keep away from memecoins and refuse to call it trading. My work is built on reading volume and the moves of large capital, and in a low-liquidity memecoin the volume is distorted by manipulation, with essentially nothing to read there. Where the price is moved not by the market but by a couple of whales and an emotional crowd, any technical analysis turns into guesswork. So it is more honest to call things by their names: this is a game of chance, not an investment.

If resisting the hype really is beyond you, the one sober rule is this: put in only the sum you are ready to lose in full and without regret, and never touch serious capital or borrowed money for the sake of memecoins. Treat it as a lottery ticket, not as a strategy for earning. And do not carry money there under the spell of someone else's delight on social media: by the time everyone is shouting about a coin, the early participants are usually exiting, and you are left with the role of the one buying at the very top. And remember the main mark of a scam: any promise of guaranteed profit or sure multiples is fraud, in memecoins especially. Whatever is left is worth storing so that you hold the keys, because not your keys, not your coins. How to tell a normal project from a scam and spot the red flags I show in the video: how to spot red flags and not lose money. Why honest volume exists only on an exchange and not in tokens like these I explain in the course section on volume analysis.

In short: This is not trading but a lottery: the method cannot be read here, the volume is distorted by manipulation; if you play, only with money you can afford to lose in full, and a guarantee of multiples is fraud.