Memecoins have been in the news recently, primarily driven by the launch of the president’s $ Trump coin. Recently, the US SEC clarified that Memecoins are mostly not securities as they do not meet the Howey test. However, this does not mean that clients will not question these assets.

So in today’s crypto for advisers, Janine Grainger from New Zealand-based Easy Crypto gives a breakdown of what Memecoins are, how they work and the risks associated with them.

Then Kieran Mitha, a next Geninvestor, answers questions about learning about Memecoins in Ask an expert.

– Sarah Morton

You read Crypto for advisers, Coindesk’s weekly newsletter that unpacks digital assets for financial advisers. Subscribe here to get it every Thursday.

MEMECOINS: BOOM, BUST and BILLION DOLLAR BETTERS

On January 17, a new meme coin was called $ Trump launched by the elected president. Its market value peaked at $ 14.5 billion within two days, but soon crashed two -thirds. Units behind the coin allegedly rose close to a cool $ 100 million in commercial fees in less than two weeks (and even more from liquidations). Still, hundreds of thousands of everyday investors lost significant amounts. Meanwhile at the end of 2024, when Trump announced a department of government efficiency (DOGE), Cryptocurrency Dogecoin rose 150%, which far exceeded Bitcoin’s winnings.

Moments like these have attached meme -coins to the investment radar. However, driven by hype rather than benefit, they create both opportunities and risks for investors, and financial advisers need to understand their unique market dynamics, as clients with high net worth can ask them despite their speculative nature.

Figure 1: Coindesk -View over $ Trump, which fell shortly after launch.

What are memcoins?

Memecoins are cryptocurrencies derived from internet culture, social media developments or jokes. Unlike Bitcoin or ether, which over time has built up a case for admission to a diversified portfolio, Memecoins thrive with hype, community mood and celebrity endorsement. While they often start as a parody or joke, viral marketing and speculative trade can give them serious traction self-self this is usually short-lived.

Why meme coins mean

Memecoins have gained mainstream visibility because of their cultural relevance and potential for great short-term gains. High -profile figures like Elon Musk have given rise to events with a single tweet that drives speculative interest. But while dealers are drawn to the possibility of wealth overnight, Meme-coins are high-risk assets with unpredictable price fluctuations.

The price of meme coins can skyrocket or collapse within hours, leading to massive gains or total losses, such as ‘Fartcoin’, a joke token that hit a $ 2.2 billion market capital, before they fell like early investors going out. Platforms like pump.Fun amplify this speculation by enabling users to create and act meme -coins with minimal technical knowledge. This has led to a flood of short-term tokens that strengthens the high-risk character of the market.

But are they legal?

Ironically, Securities and Exchange Commission’s regulatory attitude has helped Memecoins thrive. While tool -driven crypto faces control and legal obstacles, Memecoins operate in a gray area as they give no promises of financial returns. This has given rise to their spread.

The dark side: blankets pull and scam

Unfortunately, Memecoins are a breeding ground for ‘pump-and-dump’ schemes where influencers hype a token to increase its price and then pay out, leaving everyday investors worthless possessions.

A recent example is Viral Internet Personality Hailey Welch that launched $ HAWK after online notorious. Within a day, the coin’s market capital approached half a billion dollars before collapsing and triggering fraud allegations. Similarly, Argentina’s President Javier Milei inadvertently triggered a scandal as he promoted $ weight, which also increased and crashed, leaving him open to claims of market manipulation. These events highlight why meme coins are often considered as cryptocurrencies with little inherent value or long-term viability.

Figure 2: Coindesk -View of Hawk Tau ($ Hawk), which fell shortly after launch.

MEMECOIN Investment Sesions

Investors must remain cautious as many memcoins lack transparency. For those who are still interested, the most important risk factors include:

• Liquidity: Low trade volumes lead to extreme price fluctuations, making it difficult to get into or leave positions.
• Community Sentiment: Social media operates price movements. Monitoring X (Twitter) and Telegram can provide market insight.
• Tokenomics: Some Memecoins drift scarcity, while others have an unlimited supply that dilutes value over time.
• Pump-and-dump risk: Aggressively marketed tokens with unrealistic promises often signals a short-term hype cycle rather than a sustainable investment.
• Early entry vs. life: Getting in early can be lucrative, but the risk of sudden crashes is great. Some investors prefer established Memecoins with strong communities rather than chasing the latest trend.

While Memecoins can offer rapid gains, their volatility and susceptibility to manipulation make them at high risk. Advisers should educate clients about their speculative nature and emphasize proactive risk management. In the end, Memecoins are more related to games than traditional investment.

AndJanine Granger, CEO, Easy Crypto

Ask an expert

Question: I see people on social media getting rich from memcoins … can I do the same?

ONE: While some people have made significant profits from Memecoins, it is important to remember that social media often highlights success stories while ignoring the many who lose money. Memecoins are very speculative and their prices can be driven by hype, celebrity’s endorsements such as Elon Musk and market mood rather than solid basic.

If you are considering investing, approach it with caution. Timing is all – many early buyers see significant gains, while those who buy in late are often facing losses when hype fades, or the rug is pulled. If you invest, treat it as a high-risk effort rather than a guaranteed path to wealth. Never invest more than you can afford to lose, and always do your own research before making decisions.

Question: What role does society play in success with a Memecoin?

ONE: The community is the backbone of any successful Memecoin and supports the overall mood of the project. Unlike traditional investments where value is often tied to revenue or utility, memcoins thrive with presence on social media, viral trends and grassroots enthusiasm. A strong, committed society can run adoption and keep a project relevant, but without sustained interest, even popular Memecoins can fade quickly. Before investing, check how active the community is on platforms like X, Discord and Reddit.

Question: How can I learn about Memecoins before I invest?

A: The most effective method of acquiring knowledge of Memecoins is through thorough research and active participation in society. Beginning by following reputable cryptocurrency places, examining whitepapers and engaging in forums such as Twitter, Reddit and Discord, where communities actively discussing projects in real time. Consider factors such as the project’s website, roadmap, developer engagement and tokenomics.

It is also important to understand the risks involved – Memecoins are often characterized by high speculation; Therefore, you can familiarize yourself with market trends, trade strategies and potential scams help you make well -informed decisions. Does not depend solely on the hype or social media – influences; It is important to perform your due diligence.

-Kieran Mittha, Crypto Enthusiast & Communications Major

Continue to read

• The US Bitcoin Strategic Reserve along with the digital asset warehouse was announced at Whitehouse’s first digital asset meeting.
• In a statement published on Friday, the officer of Comptroller of the Currency (OCC) told the banks that custody crypto along with other assets.
• The American Bitcoin Act from 2025 was introduced to the house on Tuesday.