What exactly are meme coins? A financial experiment or a tulip bubble of the digital age?

When it comes to the most magical entities in cryptocurrency, Meme coins definitely rank first. A Shiba Inu meme pack can be pumped to a trillion-dollar market cap, and Elon Musk’s casual tweet can send Dogecoin to the moon—these tokens born from jokes, with their crazy price swings and wealth creation myths, have sharply challenged traditional finance.

The question is: are they just bubbles, or do they represent some new kind of species?

Let’s put them into the framework of traditional finance for a moment. You’ll find that Meme coins are not just a single role but a mix of marginalized, unorthodox elements from the traditional financial world, amplified together. They are both a carnival of speculative desire and a digital totem of community culture, and perhaps even a mirror reflecting the flaws of the modern financial system.

From a Market Perspective: Lottery or Trash Assets?

If we had to find a comparable in traditional finance, what would Meme coins resemble? Lottery tickets and casino chips.

First, the lottery logic. Anyone who has bought a lottery ticket understands: spend a few bucks for a chance at an almost impossible jackpot. Meme coins operate exactly this way—most buyers don’t care about technology, use cases, or cash flow analysis (because these don’t really exist); they believe in one thing: that someone even more foolish will buy at a higher price to take their place.

This is the classic “fool’s gamble” theory, a perfect illustration in the digital age.

But unlike traditional lotteries, Meme coins have no fixed draw time. Their “drawing” is continuous and random—perhaps triggered by a trending social media post, a shout-out from a celebrity, or a sudden community hype. Price movements no longer reflect company fundamentals but become a heartbeat of collective sentiment: stories of sudden 500% surges or overnight crashes happen daily.

Next, consider “penny stocks” and “junk bonds.” Some might say, isn’t this just like high-risk, high-reward assets in traditional markets?

Not quite. Penny stocks, no matter how bad, at least have a legal entity behind them, assets, or operations (even if near bankruptcy), and are subject to regulatory oversight. Junk bonds, despite their high default risk, are priced based on credit ratings, collateral, and cash flow expectations, with analytical frameworks.

Meme coins? Most are created on decentralized networks, with no controlling entity, no revenue streams, and smart contracts that may harbor vulnerabilities. The scariest part: “Rug Pulls”—developers suddenly withdraw liquidity, causing the token to plummet to zero, leaving investors helpless.

This layered systemic risk pushes Meme coins’ speculative nature to a new height in human financial history.

From a Cultural Perspective: They Are Social Currencies

If Meme coins were just gambling tools, they wouldn’t have such resilience. Their true strength lies in transforming financial instruments into cultural symbols and social entry tickets.

A prime example is the “GameStop event” in 2021. Retail investors on Reddit’s WallStreetBets collectively bought shares of GME, successfully countering hedge funds shorting the stock. In that process, GME was no longer just a stock certificate but a banner—“I’m part of WSB, standing against Wall Street.” Holding GME became a declaration of identity.

Meme coins pushed this concept to the extreme.

Holding Dogecoin signifies your endorsement of its satirical slogan “People’s Currency,” understanding its origin as a mockery of Bitcoin in 2013, and joining a global, humorous movement. The Shiba Inu coin created a massive “SHIB Army,” fostering a sense of belonging and purpose through complex narratives and burning mechanisms.

Here, investing is no longer cold data analysis but a warm expression of identity and community building.

And then there’s “social capital.” In the age of social media, attention is the scarcest resource. Meme coins essentially monetize collective attention. A successful Meme coin is a self-replicating, viral cultural gene.

Early discovery and promotion of a Meme coin can bring not only financial returns but also social capital—you’re seen as a visionary or a meme king. This social capital can even feed back into the price: community members’ memes, emojis, and topic hype all contribute to an unwritten “cultural valuation” of the token.

Thus, Meme coin’s value cycle is: community culture creates attention → attention attracts funds → rising prices reinforce belief → belief spawns more cultural content. This bottom-up value creation model is almost impossible to find in traditional finance.

From a Historical Perspective: Another Speculative Bubble

Looking at financial history, Meme coins are not a new species—they are just the latest iteration of human speculative bubbles in the digital age. Comparing them to the Dutch Tulip Mania, South Sea Bubble, or dot-com bubble reveals startling similarities.

The core is always “narrative-driven.” In 17th-century Netherlands, tulip prices detached from their ornamental value, driven instead by narratives of rarity, uniqueness, and status symbolism. A single bulb could exchange for a mansion. In the early 21st century, internet bubbles saw company valuations based not on profits or cash flow but on “clicks.”