Memecoins: When a Joke Becomes a Multi-Billion Pound Asset Class
What actually separates a memecoin from any other cryptocurrency, and why the same structural risk shows up in every one of them, whatever the mascot.
By Firoz Khan|23 August 2026|Updated 20 September 2026|6 min read
A memecoin is a cryptocurrency created primarily around a joke, meme or cultural reference rather than a specific technical purpose or product roadmap. Dogecoin popularised the category, and a huge wave of similarly-themed tokens has followed, with wildly varying degrees of longevity and, in the vast majority of cases, no underlying utility at all.
What actually drives a memecoin's price
Community size, social media momentum and cultural relevance drive memecoin valuations almost entirely, in the near-total absence of the fundamentals, revenue, usage, a defined problem being solved, that at least partially anchor the valuation of most other cryptoassets. That makes them some of the most sentiment-driven, and volatile, assets in the entire crypto market.
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Why supply design deserves real scrutiny here
Many memecoins launch with an enormous total supply and heavy concentration in the founding team's or early insiders' wallets, which creates real risk of large, sudden sell-offs crashing the price for everyone who bought in later. Checking token distribution before buying matters more for memecoins than for almost any other category.
The rug pull risk specific to this category
Memecoins are launched constantly, often anonymously, with minimal or no development effort behind them beyond the initial hype push, making them a favoured vehicle for rug pulls, where creators abandon the project and cash out shortly after launch, sometimes within hours.
A realistic way to size any memecoin exposure
Treat any memecoin allocation as pure speculation on cultural momentum, sized as money you'd be entirely comfortable losing outright, and separate from whatever you might allocate to established cryptoassets with genuine underlying use cases. The category has produced some real, if largely unrepeatable, success stories, and a far larger number of total losses that don't make the headlines.
A reminder
The FCA risk warning still applies to higher-risk crypto content. Always assess how much risk you are willing to take before buying.
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