Just a Joke? What Are Memecoins vs Memestocks?

Rising meme culture has created new financial tools: memecoins and meme stocks.  

In this article, we’ll break down what memes have to do with finance, answering the following questions:

• What are memes?
• How are memes used for investments?
• What is a memecoin?
• What is a memestock?
• What’s the difference between memecoins and memestocks?
• Which is a better investment?

What Are Memes and Why Meme Culture Has Become So Popular?   

Perhaps you’re familiar with memes – those funny ideas, texts, images, GIFs, and videos all over the internet. Many people today share memes when they find the content relevant and engaging.

One reason for memes’ popularity is that they can easily be adapted to different contexts.
Memes have become so widespread that when actor Cillian Murphy said in a 2017 NME interview that he didn’t know what a meme was, his answer went viral and became a meme itself.

But that was in 2017. Now, at the end of 2024, more people – including the actor himself – are familiar with the concept.

Now I know that there are memes about me not knowing what a meme is

Murphy said in 2023.

And speaking of the actor, we can’t forget his sometimes disappointed look in interviews, which has inspired many memes.

Cillian Murphy’s not knowing what a meme is became a meme. Source: Reddit

Disappointed Cillian Murphy meme. Source: TikTok

It’s a fact that memes often go viral.

But what is it about memes that makes them so integrated into society?

The reason might be the same as why webcomics became popular in the late 2000s. They feature characters going through relatable situations and emotions that everyone can connect with.

With the rise of smartphones and the ease of content sharing, internet humor has become more widespread.

Since the early 2010s, memes have gradually gone mainstream. They’re now often used as a means of communication. You can explain an idea with a meme by combining text and visuals to deliver your message in a way that’s accessible and often humorous.As of December 2024, one of the viral memes is “Just a Chill Guy.” 

It shows a cartoon dog with his hands in his pockets and a relaxed look. The meme was created by artist @PhillipBankss in October 2023 and quickly became a sensation.

Interesting fact: The term “meme” was coined by biologist Richard Dawkins in his 1976 book The Selfish Gene. Originally referring to an idea, behavior, or style that spreads within a culture, the word has since been adopted by the internet to describe viral content.

How Memes Became a Tool in Trading and Investing  

Over time, memes have grown into more than just internet jokes.

Social interactions through memes sparked the idea of using them as financial assets – more specifically, as social currency.

The phenomenon of meme-based assets began in the 2010s, driven by online community discussions. For example, on Reddit, X (formerly Twitter), and other platforms, traders started analyzing different stocks, potentially influencing their performance.

Memes create a shared purpose among investors, who can come together to drive an asset’s price or use it for social goals, like sponsorship or charity. Thus, meme-based tools carry special meaning related to the concept they’re based on, such as news, politics, humorous art like Just a Chill Guy, or something else.

Investments based on memes, like Dogecoin (a memecoin) and Gamestop (a memestock), stand out due to their emotional influence. The ideas behind them serve as branding, and this branding creates a sense of belonging to a community.

How Did Memecoins Start?   

The earliest example of an investment tool that combines the concepts of a meme and currency is Dogecoin (DOGE), a well-known cryptocurrency. 

Launched in December 2013 by Billy Markus and Jackson Palmer, Dogecoin was created as a joke, based on two trending ideas: Bitcoin and an internet meme featuring a Shiba Inu dog named Kabosu.

Kabosu was adopted by Japanese kindergarten teacher Atsuko Sato. When she posted several pictures of the dog in early 2010, they quickly spread across the internet and became a popular subject for memes.

Photographs of Kabasu inspired internet memes. Source: Know Your Meme

When the creators of Dogecoin made the beloved meme the face of their joke cryptocurrency, it quickly became a hit.

To understand the memecoin’s quick popularity, you only need to look at its transaction volume.

According to Dogecoin’s official website, within two weeks of its launch, DOGE’s daily transactions surpassed Bitcoin’s.

Dogecoin’s success continued. One of its peak moments came when it was mentioned by Elon Musk.

The Tesla founder has posted about DOGE multiple times on X. In 2021, his appearance on SNL, where he discussed DOGE, helped the memecoin reach a new all-time high of $0.7.

Today, DOGE remains a popular investment and trading tool.

Following Dogecoin’s success, several other memecoins have been launched. However, as of writing, DOGE is still the largest among them, with a market cap of over $57 billion. Other popular cryptos in this category include Shiba Inu (SHIB), Pepe (PEPE), Dogwifhat (WIF), and more.

What’s common among memecoins is that they’re tied to internet culture, are relatable, and have strong communities. As a result, their price and popularity typically depend on the hype around them and community engagement.

What About Memestocks?   

While Dogecoin is the first memecoin, GameStop (GME) is considered the first memestock. Both assets are highly engaging and have large communities.

A memestock is a share of a company whose value depends on growing attention from the online community. When retail investors unite on social media forums and decide to buy a memestock, they can drive its price up.

This is exactly what happened with GameStop.

In 2020, the American video game and consumer electronics retailer was struggling with sales. GameStop's stock was falling as major institutions shortened their positions.
In December 2020, GME was valued at just $4.82. However, retail investors decided to change the course of events.

On the Reddit forum WallStreetBets, traders began discussions claiming GME was undervalued. Redditors joined forces to boost GME’s price by actively buying the stock.

Their efforts quickly created a market sensation.

In a matter of days, GameStop’s market value soared from $2 billion to over $24 billion. In January, GME skyrocketed by about 2700%, reaching an intraday high of $483 on January 28, according to the Financial Times. At its peak, around 900,000 individual accounts traded GME in a single day.

GME’s bullish performance became huge news, attracting attention from many, including Elon Musk.

However, the stock didn’t hold its peak for long. Its price dropped significantly, and by mid-February 2021, GME was trading around $40. In June 2021, it surged again to $300. The ups and downs continued, and as of now, GME trades around $27.

GME is up about 60% in 2024, despite the decline in sales and store closures.

Besides GME, other meme stocks that saw increases following WallStreetBets discussions included tech company Blackberry, movie theater chain AMC, and electric car maker Nio.

These stocks gained the name meme stocks as their prices are tied to meme culture. They spread rapidly and reflect participation and unity – features characteristic of memes.

While these stocks are not linked to specific internet memes like memecoins, they share traits of meme culture, such as hype and viral spread through social media forums like Reddit’s WallStreetBets.

So, What’s the Difference Between Memecoins and Memestocks?   

Memecoins and memestocks might seem similar because they both rely on online communities, but they’re actually pretty different when you dig into them.

Memecoins, like Dogecoin and Shiba Inu, are basically cryptocurrencies that lean on humor and the idea of being part of a fun, meme-filled community to attract people, according to Investopedia.

On the other hand, a memestock is just a company’s stock that goes viral thanks to a lot of buzz, especially on social media. So, it’s not about the company’s performance—it’s all about the hype.  

The first big difference is in the tech behind them. Memecoins are built on blockchain technology, while memestocks are just regular stocks traded on the market.

Then there’s how their prices are tied to the actual asset. With memestocks, the price can go up or down based on hype, even if the company’s business isn’t doing well. Like with GameStop, the stock price shot up even when the company was losing money.

With memecoins, though, the price is more closely tied to how popular the coin is and how strong its community is. The more people are talking about it and supporting it, the higher the price tends to go.

For example, exchanges usually look at the size of a memecoin’s community before listing it, and retailers might even start accepting popular memecoins. So, a memecoin’s value and use really depends on how big its community gets.

On the flip side, a memestock can see its price shoot up even if it’s not actually adding any real value to the company behind it.

Difference between memecoins and memestocks

Common Terms Among Memecoin and Memestock Communities   

To avoid feeling confused in memecoin and memestock forums, there are some slang terms you need to know. These include:

???? Ape: Used in memestock communities, APE means a retail investor who is bullish on assets like GameStop or AMC. A popular saying is “Apes Together Strong.” It’s used to show that the community is united and determined to take action. The term originated from a meme based on the movie Rise of the Planet of the Apes.

???? Diamond Hands: Used both in memecoin and memestock communities. Diamond hands are investors who refuse to sell during market panic and turbulence. These types of investors maintain confidence in the potential of their asset despite price drops or negative sentiment. For memecoins, HODL and Hodler terms are also common in this context.

✋ Paper Hands: Like diamond hands, paper hands are also used by memecoin and memestock supporters, but it has the opposite meaning. It refers to investors who sell their assets too quickly or out of fear during price fluctuations.

???? Stonk: Mainly used for memestocks. This is an intentional misspelling of the word “stock” to indicate extraordinary market behavior such as big profits or losses.

???? YOLO: Used in financial markets and everyday life, YOLO stands for “You Only Live Once.” In trading, it means making risky decisions.

Which Is a Better Investment: Memecoin or Memestock?   

For those who prefer traditional investment tools, memestocks might be a better option. Memestocks are traded on the stock market, which may be more convenient for some investors.

On the other hand, memecoins offer a wider range of investment opportunities. The number of memecoins is rising quickly, which has both pros and cons. While you can discover new coins to invest in, there are also increased risks of scams and phishing attacks.

You can buy memecoins on launchpads, as well as on decentralized and centralized crypto exchanges.

In terms of returns, both memecoins and memestocks can be profitable depending on demand. However, they are generally considered speculative investments. When deciding which option is better for you, consider your risk tolerance and investment goals.

Disclaimer: Please note that this article is for informational purposes only and does not constitute financial advice. Always do your own research before investing in any asset.

FAQ

1. How Memes Became a Part of Investing and Trading?

Memes took over investing through social media platforms like Reddit, where users started hyping stocks and cryptos for fun. Trading memes can give people a sense of belonging and excitement, turning investing into a social event. 

2. What is the Difference Between Memecoins and Memestocks? 

Memecoins and memestocks differ in their technology and fundamentals. Memecoins, such as Dogecoin operate on the blockchain, while memestocks like Gamestop (GME) are shares of a company that have gained popularity due to online communities. 

3. How to Choose Which Meme-Related Tools to Invest in?

If you prefer more traditional assets, memestocks may be a better choice for you. If you're more interested in blockchain technology and crypto, memecoins could catch your attention. Whatever you choose, research the asset, including aspects like community strength and associated risks. 

4. What Are Popular Memecoins and Memestocks in 2024? 

Popular memecoins in 2024 include Dogecoin, Shiba Inu, and Floki Inu. Popular memestocks include GameStop and AMC.