Meme coins shake up cryptocurrency investments as Gen Z seeks new financial paths

Meme coins like Dogecoin and Shiba Inu, born from internet culture, are gaining popularity and reshaping the crypto market landscape.

Ever since the inception of the first cryptocurrency to the global finance market in 2009, crypto has continued to reshape the global finance. Within the cryptocurrency sphere, a subcategory has risen called meme coins. These are digital assets born from internet jokes and cultural phenomena. Starting off as more of a joke, meme coins have come to surge in popularity and in market relevance. It is a movement with cultural roots, which shows potential for immense gains, as meme coins such as Dogecoin, Shiba Inu, and Wallstreet Pepe, have become mainstays in digital asset portfolios. Each of these plays on a popular meme, such as Dogecoin’s Shiba Inu ‘Doge’ meme or Wallstreet Pepe’s ‘Pepe the Frog’ comic character.

The rise in popularity of meme coins is reframing cryptocurrency investment norms, while encouraging younger generations to engage with financial markets.

Meme coins and financial nihilism

Investing in meme coins is not just about profit for many: It is also about resisting traditional financial systems, as these among younger generations are viewed as obsolete and exploitative. This sentiment is referred to as ‘financial nihilism’, and it reflects a widespread loss of faith in conventional finance. This has especially been the case among Millennials and Gen Z.

Due to inflation, volatile markets, and lower incomes, many young investors are increasingly unable to afford housing and other major investments. Rising living costs and inflationary pressure continue to be a reality for many. As a response, many are exploring alternative financial avenues, which in some cases can offer a fast track to financial independence. This is where meme coins have become a frontrunner of opportunities.

Research from Altify highlights the trend: It shows that meme coins’ cultural resonance and the accessible entry points of them are luring many first-time investors into the digital asset space. For crypto investments, Bitcoin and Ethereum are still in the lead as safe and long-term assets. However, meme coins show promise of exponential returns, making it desirable for risk-tolerant investors who can accept the volatility of these tokens.

According to Altify’s data, both Dogecoin, Shiba Inu, and Pepe have outperformed Bitcoin and Ethereum over the last 3 and 6-month timeframes. Especially Pepe have been standing out by outperforming both Bitcoin and Ethereum by over +1,650% on a 12-month basis.

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Meme coins as cultural movements

Meme coins go beyond finance with roots in the social and digital realms. Meme coins draw from Richard Dawkins’ concept of memes, which are cultural units propagating ideas. Meme coins are, therefore symbols of the internet age’s collective humor, irony, and rebellion against the status quo. Take for example Dogecoin, which is based on a Shiba Inu meme. This crypto has since attracted influential personalities like Elon Musk, who helped elevate it to mainstream visibility. Meme coins are, therefore the embodiment of a blend of humor and finance, making them resonate with an online culture rooted in satire and viral trends.

Pepe Coin, or Wallstreet Pepe, is inspired by the famous ‘Pepe the Frog’ meme. This meme coin has both generated financial gains for holders, but it has also sparked an online community identifying with the ethos of subverting traditional finance. In comparison with conventional cryptocurrencies, meme coins prioritize community and meme culture instead of fundamental technological advantages,

The economic influence of meme coins

Meme coins are largely perceived as speculative assets. However, they have demonstrated considerable staying power. Since the beginning of the 2023-2024 cryptocurrency bull market, meme coins have continued to outperform more established digital assets. Research has found that there is a tendency of meme coins to surge in value when bull market near their peaks.

With this cycle, meme coins are showing strength earlier, which suggests an evolving market dynamic. Data from the 2024 cryptocurrency cycle has found that the popular meme coins include Dogecoin and Shiba Inu, which are outperforming Bitcoin and Ethereum significantly. Analysis suggests that the appeal of meme coins lies in their low initial cost and the potential of high returns. This has especially become attractive for younger investors who do not have substantial initial capital.

However, the gains from meme coins come with risks. Volatility is an inherent feature of meme coins, which can result in investors experiencing rapid value fluctuations. Where Bitcoin and Ethereum are stable assets with long-term growth potential, meme coins are behaving more like speculative stocks. Take for example the 1,650% rise of Pepe Coin over the past year: This is both highlighting the potential of this meme coin, but also the unpredictability of meme coin investments.

The mainstream impact of meme coins and institutional interest

As meme coins are gaining momentum, they have attracted the attention of institutional investors and mainstream exchanges. For example, Wallstreet Pepe has gained traction as it mirrored the anti-establishment ethos of the Wall Street Bets movement, which rose to fame in 2021 by driving up stocks like GameStop. Currently, Wallstreet Pepe is a niche asset, but the reception of the digital assets highlights how meme coins are tapping into larger socio-economic sentiments.

As meme coins are growing in popularity, major exchanges are starting to list meme coins and offer them alongside more established cryptocurrencies. This inclusion is granting legitimacy to meme coins, which is both appealing to retail and institutional investors. Major exchanges such as Binance and Coinbase have seen increased trading volume on meme coin listings, which is directly reflecting how meme coins are having an increasing impact on cryptocurrency exchanges and the financial sector.

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