The Truth Behind the Meme Coin Frenzy: From Illusory Prosperity to Market Collapse

In the cryptocurrency market, a grand spectacle centered around “value” is unfolding. The so-called meme coin— a digital asset entirely based on community enthusiasm and market sentiment— has suddenly become the focus of global attention, experiencing a rollercoaster ride in just a few weeks, with market capitalization soaring from zero to billions of dollars and then crashing back to the bottom. During this storm, politicians, businesspeople, and crypto practitioners have all entered the scene, yet few admit to being the masterminds behind it.

Meme Coin: A Collective Illusion of Speculation

The concept of meme coins is not new. In 2013, two software engineers, inspired by the Shiba Inu meme on Reddit, created Dogecoin, initially as a joke. No one anticipated that this joke would evolve over more than a decade into a global speculative frenzy.

Unlike traditional financial assets, meme coins lack real business models, cash flows, or even clear use cases. According to any rational valuation logic, their value should be zero. However, as long as enough participants believe that “the next bag-holder will buy at a higher price,” prices will continue to climb— this is the textbook depiction of a “speculative bubble,” as economists call it.

In some cases, the price increases of meme coins like Dogecoin and Bonk have exceeded tenfold. This attracted a large number of retail investors hoping to profit from the rapid changes in the crypto market. But reality is often harsh: according to statistics from multiple data analysis agencies, over 90% of meme coins will eventually plummet, and early holders who profit and exit often leave subsequent buyers with nothing.

Ecosystem Chain: From Platforms to Promoters

The rapid proliferation of meme coins benefits from a complete industry chain. Some dedicated crypto trading platforms have lowered the barriers to creating tokens, allowing anyone to issue a new digital asset within minutes— no programming knowledge or regulatory approval needed. These platforms profit by charging transaction fees, which often amount to 3-5% of the trading volume.

Take a leading platform as an example: its annual revenue in the past year reached around $1 billion, with 90% coming from fees generated by meme coin trading. This means that even if the market is flooded with “shitcoins” and fraudulent projects, the platform has economic incentives to maintain lax review policies.

Within this ecosystem, a group of “promoters” also remains active— including social media influencers, crypto bloggers, and celebrities. They promote new meme coins to attract retail participation, often buying early or receiving token rewards as “insiders.” When prices surge, these promoters quietly exit, leaving latecomers to bear the losses.

This pattern is known as “pump and dump,” a clear market manipulation in traditional finance. But in the regulatory vacuum of the crypto market, it is carried out under the guise of “community marketing.”

Power and Interests Intertwined

In early 2025, an international meme coin scandal revealed the collusion between power and capital. A national leader unexpectedly participated in promoting a meme coin project, which then plummeted over 95% within hours. This sparked widespread public suspicion— why would political figures get involved in such high-risk, highly speculative projects?

Subsequent investigations showed that a team centered around young entrepreneurs manipulated the entire process behind the scenes. They established contacts with political figures through various channels, promising quick profits, ultimately triggering a “political endorsement + market hype” synergy. Chain analysis data tracked that this team profited over $150 million from the project— money directly taken from retail investors who bought in later.

Similar stories continue to recur across the global crypto scene. Star entrepreneurs, political advisors, exchange executives, and various participants switch roles— sometimes acting as promoters, sometimes as technical developers, sometimes hiding behind the scenes. Their intertwined stories have attracted millions of ordinary investors.

The Paradox of Blockchain Transparency

Ironically, blockchain technology is highly praised for its “transparency and immutability,” yet in meme coin speculation, this transparency often becomes a tool for exposing fraud.

Blockchain analysts, tracking transaction addresses, have uncovered startling patterns: some large buyers completed massive purchases within seconds before project launch; certain addresses show coordinated trading behaviors; some tokens experienced rollercoaster price swings from zero to dozens of times higher and back to zero within minutes.

These traces indicate that the meme coin market is far from the “free competition” ideal; it is a “casino” rife with insider trading, market manipulation, and coordinated fraud. Yet, due to the lagging regulation of the crypto market, these manipulators often remain beyond reach.

Regulatory Gaps and the “Legal Gray Area”

Currently, most national financial regulators adopt a “wait-and-see” attitude toward meme coins. The U.S. Securities and Exchange Commission (SEC) has stated that while it does not actively regulate meme coins, “laws related to fraud still apply.” This statement appears responsible but is effectively hollow—without proactive regulation and professional tracking, fraudulent activities are difficult to detect and prosecute.

In this regulatory vacuum, a “legitimate fraud system” is gradually taking shape: project teams craft sophisticated legal structures to evade oversight; they use dispersed addresses and cross-border transfers to hide fund flows; they employ vague marketing language to avoid “direct promises.” As a result, the meme coin market has become one of the most opaque and least protected investment territories in modern finance.

Investor Awakening and Market Cooling

As more people suffer losses, market sentiment begins to shift. Data shows that after mid-2025, the overall trading volume of meme coins dropped by 92% from its peak. Many retail investors realize they are not “discovering the next Dogecoin,” but participating in a “hot potato” game— someone will always be the last bag-holder.

Prominent investment lawyers state that dozens of lawsuits are currently underway, involving hundreds of millions of dollars. Although progress is slow, these cases mark a turning point: investors are beginning to use legal means to hold meme coin project parties accountable.

Reflection: Technology Is Innocent, but Human Nature Has Flaws

The biggest reflection prompted by the meme coin phenomenon is that blockchain and decentralized technology are inherently neutral; the problem lies in the motives of participants. When innovative technology is used to serve greed and manipulation, it ceases to be a tool for progress and instead becomes a means of plunder.

Some industry insiders argue that the existence of meme coins reflects human nature—people crave quick wealth, risk participation, and believe in impossible stories. Under this logic, meme coins are merely “tokenizing” these desires. But this view overlooks a key fact: in environments of information asymmetry and manipulation, “free choice” is often just an illusion.

Currently, the crypto market is still seeking a balance: how to protect innovation while preventing fraud and manipulation? How to ensure retail investors have access to sufficient information and protections? The answers to these questions are not only crucial for the future of cryptocurrencies but also for the integrity of the entire financial system.

At the end of this meme coin frenzy, many participants have learned an expensive lesson: in markets lacking genuine value support, no matter how advanced the technology or how enthusiastic the community, lasting wealth cannot be sustained. Only assets built on real applications and reasonable valuations can withstand the test of time.