Have you been shocked by the get-rich-quick stories on social media about Dogecoin and Shiba Inu skyrocketing by hundreds of times overnight? Or are you curious about the news of how “meme stock” GameStop (GME) gave Wall Street giants a massive headache? These “meme assets,” driven by netizens and community power, are subverting our understanding of traditional financial markets in an unprecedented way.
Their rise sometimes feels like a wild party, and other times like a heart-pounding roller coaster.
For many eager novice investors, this field, full of opportunities and pitfalls, is both fascinating and dangerous. Don’t worry! This article will be your most complete “survival guide” before entering this crazy world. We will start from scratch, giving you a simple and in-depth understanding of the fundamental differences between meme coins and altcoins. We’ll also provide a step-by-step guide on how to buy Dogecoin, and finally, we’ll analyze the “meme stock” phenomenon that has spread from the cryptocurrency circle to the stock market. Are you ready? Let’s unveil the mystery of the meme universe together!
Key Takeaways of This Article:
The origin of meme coins might be more absurd than you think. It didn’t come from a major technological breakthrough or a business blueprint, but from the humor, satire, and community culture of the internet world. Simply put, it’s the “influencer of the cryptocurrency world.”
The story begins in 2013, when Bitcoin was gradually gaining attention. Two engineers, to satirize the speculative frenzy in the crypto market, created Dogecoin inspired by the viral “Doge” Shiba Inu meme. They never expected that this creation, born as a joke, would one day, with the backing of celebrities like Tesla founder Elon Musk, see its market cap exceed $80 billion, becoming one of the top ten cryptocurrencies in the world.
The success of Dogecoin opened a Pandora’s box. Various animal-themed and concept coins, such as Shiba Inu (SHIB), which calls itself the “Dogecoin killer,” and Floki Inu (FLOKI), emerged one after another, forming a massive family of meme coins.
Unlike mainstream cryptocurrencies such as Bitcoin (with its blockchain technology foundation) or Ethereum (which supports smart contract applications), the vast majority of meme coins have no technical innovation. So where does their value come from? The answer is: community consensus and media hype.
Imagine a meme coin as a large-scale social experiment. Its price is not determined by fundamental analysis but is driven by community cohesion, the volume of online discussions, and celebrity “endorsements.” When everyone is talking about it and believes it will rise, this collective belief attracts more people to invest, which in turn pushes the price up, creating a positive feedback loop of “consensus value.” This is why a single tweet from Musk can send the price of Dogecoin to the moon.
Since their value comes from intangible attention, the price volatility of meme coins is naturally extremely high. This is a double-edged sword:
Investing in meme coins is like surfing on the crest of a wave—it’s thrilling, but there’s always the risk of being swallowed by a giant wave. Therefore, it is crucial to have a deep understanding of their nature before investing.
In the world of cryptocurrency, you might often hear the term “altcoin.” Many beginners confuse meme coins with altcoins, but in reality, there are fundamental differences between them. Understanding this is a basic lesson for investing in the crypto space.
The word “Altcoin” is short for “Alternative Coin.” In a broad sense, all other cryptocurrencies besides the big brother, Bitcoin, can be classified as altcoins.
This includes well-known ones like Ethereum (ETH), Ripple (XRP), and Binance Coin (BNB). These projects usually have their own blockchain, technical goals, and application scenarios, aiming to improve upon some of Bitcoin’s shortcomings (like transaction speed, functionality, etc.) or to create entirely new application areas (like DeFi, NFTs).
We can say that “all meme coins are altcoins, but not all altcoins are meme coins.” Meme coins are just a special branch of the vast altcoin family. Their core differences can be seen at a glance in the table below:
| Comparison Aspect | Meme Coin | Mainstream Altcoin |
|---|---|---|
| Core Value | Community hype, internet memes, celebrity effect | Technical innovation, solutions, ecosystem applications |
| Project Whitepaper | Usually simplistic, or non-existent | Contains a detailed technical roadmap and vision |
| Price Driver | Social media sentiment, market speculation | Technical progress, partnerships, actual adoption |
| Risk Level | Extremely high, significant risk of going to zero | High, but relatively supported by fundamentals |
| Representative Coins | Dogecoin (DOGE), Shiba Inu (SHIB) | Ethereum (ETH), Solana (SOL) |
The answer is obvious: Meme coins.
Because mainstream altcoins are supported by actual technology and applications, even if their prices fall during a bear market, they have the potential to rise again in the next bull market as long as the development team continues to operate and the ecosystem grows. However, the value of meme coins relies entirely on sustained community attention. Once the hype fades and there are no new topics to maintain exposure, people will quickly forget about them. As funds withdraw, the price may never recover, eventually heading to zero. Scams like “Rug Pulls” are rampant in the meme coin world, and investors need to be extra cautious.
💡 CashbackIsland Expert Tip: Before investing, always Do Your Own Research (DYOR). Don’t blindly chase high prices due to FOMO (Fear of Missing Out). A simple criterion for judgment is to ask yourself: if you remove the coin’s logo and name, what value is left? If the answer is “nothing,” you should be highly vigilant.
After so much theory, let’s get into the practical part! For most beginners, the first meme coin they might want to buy is “Dogecoin.” Below, we will break down the complete process of buying Dogecoin with illustrations.
An exchange is the bridge for us to buy cryptocurrencies with fiat currency (like USD, TWD, MYR). It is crucial to choose a large, reputable, and secure exchange. For beginners, it is recommended to choose a platform with a user-friendly interface.
How to choose?
We recommend reading our Cryptocurrency Exchange Recommendation guide for more detailed comparisons and analysis.
After selecting an exchange, you need to register an account. The process is usually simple, requiring just an email or phone number. However, to ensure account security and comply with Anti-Money Laundering (AML) regulations, all legitimate exchanges require users to complete KYC (Know Your Customer) identity verification.
What you usually need for KYC:
This process is to confirm that you are who you say you are and to prevent criminals from using the platform for illegal activities like money laundering. Please be sure to use your real information for verification.
Once your account is verified, the next step is to “deposit,” which means transferring money into the exchange. Common methods include:
For beginners, it’s advisable to start with a small credit card purchase to get familiar with the process before using C2C trading.
Once your funds are in, you can start trading! Go to the “Market” or “Trade” page of the exchange and enter the ticker for Dogecoin in the search box: DOGE.
You will see different trading pairs, for example:
If you deposited funds via C2C, you should have USDT, so you would choose the DOGE/USDT trading pair.
After entering the trading page, you’ll see a candlestick chart, order book, and other information. Don’t be intimidated by the complex interface; you only need to focus on the “Buy” section.
Congratulations! You now own your first Dogecoin. After the purchase, you can choose to store it in the exchange’s wallet for easy trading. If you have a large amount or plan to hold it long-term, it’s recommended to transfer it to a more secure personal “cold wallet” or “hot wallet.”
The frenzy driven by community power has not only swept the crypto world but has also spread to the century-old stock market, giving rise to the unique phenomenon of “Meme Stocks.”
Meme stocks refer to stocks whose prices surge dramatically in a short period due to massive attention and discussion from retail investors on social media platforms (like Reddit’s WallStreetBets, Twitter, TikTok). The fundamentals of these companies are often poor, and they may even be operating at a loss, but their stock price movements are completely detached from fundamentals.
The core logic is similar to that of meme coins: value originates from attention. Retail investors gather online, forming a powerful buying force to collectively drive up the stock price, aiming to challenge the large Wall Street hedge funds that are shorting these stocks.
The GameStop (GME) event in early 2021 is the most iconic battle in the meme stock phenomenon. At that time, GME, a brick-and-mortar video game retailer on the verge of bankruptcy, was heavily shorted by several hedge funds (betting its stock price would fall). However, retail investors on Reddit discovered that the number of shorted GME shares even exceeded its total outstanding shares, identifying it as a perfect opportunity for a “short squeeze.”
Consequently, thousands of retail investors used commission-free trading apps (like Robinhood) to buy large amounts of GME stock and call options. The skyrocketing stock price forced the shorting hedge funds to buy back shares at much higher prices to cover their losses. This buyback action further propelled the stock price, creating a vicious cycle. Ultimately, GME’s stock price surged by over 100 times within a month, causing massive losses for the short-selling institutions. This epic “Retail vs. Wall Street” battle perfectly illustrates the power of meme stocks.
Although both are driven by community power, there are still some key differences:
From the playful creation of Dogecoin to the stunning counter-attack by GME retail investors, meme coins and meme stocks have together composed a financial fantasy driven by community culture. They represent an emerging investment paradigm that breaks the traditional game rules dominated by institutions, filled with tempting opportunities for rapid wealth but also accompanied by the extremely high risk of total loss.
In this meme wave, there is no absolute right or wrong, only choices that are suitable for you. Before investing any money, be sure to follow these principles:
This article has provided you with a complete guide to buying Dogecoin and clarified the core concepts of meme coins, altcoins, and meme stocks. We hope this knowledge can serve as a compass for you to navigate these uncharted waters. Remember, investing is a marathon, and only by continuously learning and acting cautiously can you stand firm in the turbulent waves of the market.
CashbackIsland continuously updates trading educational resources. Traders can visit the “CashbackIsland Tutorial Guides” section to master more forex knowledge and investment skills.
In mainland China, cryptocurrency trading is in a legal gray area. In most other regions, such as Taiwan and Malaysia, buying, holding, or trading cryptocurrencies is not illegal, but they are generally not considered legal tender. However, regulatory policies vary by country and are constantly changing. Using cryptocurrencies for illegal activities such as fraud and money laundering is subject to legal penalties. Investors should pay close attention to local regulations and choose compliant trading platforms.
The world of meme coins is vast and changes rapidly. Besides the leading Dogecoin (DOGE), other well-known meme coins include: Shiba Inu (SHIB), also known as the “Dogecoin killer”; Pepe (PEPE), based on the Pepe the Frog meme; dogwifhat (WIF); and Floki (FLOKI), related to Elon Musk. However, please note that new coins in this space emerge constantly, and the vast majority have a very short lifespan.
There’s no standard answer; it completely depends on your personal financial situation and risk tolerance. A widely-circulated piece of advice is the “invest with spare money” principle—that is, only invest funds that, if completely lost, would not affect your normal life. For high-risk assets like these, many financial experts recommend that their allocation should not exceed 1-5% of your total investment portfolio. Never borrow money or use your emergency funds to invest.
This requires a significant amount of time and effort to monitor market dynamics. You can follow popular discussions on social platforms like X (formerly Twitter), Reddit, Telegram, and Discord; use the “New Listings” or “Trending” features on websites like CoinMarketCap and CoinGecko; and watch for influential figures (KOLs) mentioning new projects. However, this is a high-risk speculative activity with a very low success rate, more akin to buying a lottery ticket, and is not recommended for beginners to try lightly.
“Trading in financial derivatives involves high risks and may result in the loss of funds. The content of this article is for informational purposes only and does not constitute any investment advice. Please make decisions cautiously based on your personal financial situation. CashbackIsland assumes no responsibility for any trading derivatives.”
