What memecoins say about human behavior

Memecoins may look like jokes, but the behavior around them reveals something deeper. From social identity to emotional decision-making, their rise says less about utility – and more about us.

Driven by fun and speculation on the surface, their real pull is social – and deeply psychological. Despite offering little real utility, they continue to attract millions – so why do people still invest?

“Many people do it for the chance of having one big return, but honestly, most incur losses,” Scott Tripp, a web3 advocate, told The Crypto Radio.

More than five million memecoins were launched between January 2024 and January 2025 on platforms like pump.fun, according to CoinGecko’s 2024 Annual Crypto Industry Report. By December 2024, the total market cap had surged to $137 billion, fueled by a three-month “memecoin mania,” per CoinMarketCap.

Strong marketing isn’t enough – “proper research still needs to be done before taking any decision,” Tripp stressed.

Why people still buy in

Memecoins, such as Dogecoin (DOGE) and Shiba Inu (SHIB) thrive on psychological triggers and cultural resonance rather than technological innovation or practical use cases.

“FOMO is a rocket fuel,” Jay Koh, a web3 builder, told The Crypto Radio. “Seeing others post massive gains on social media creates intense psychological pressure, causing a sense of urgency that leads to rushed decisions.”

He explained that people often fear missing out more than they fear losing money on a small bet. In crowded online spaces, the sheer number of participants can signal that “if everyone is doing it, then it feels safe despite it isn’t.”

Tripp, meanwhile, emphasized the role of cultural rebellion. With absurdity at its core, he said, memecoins are about “going against what society thinks is valid.” “It is about helping people grow and build FOMO by sharing and showing strength. Without a genuine community, a memecoin will fail.”

Dogecoin’s cartoon mascot became a symbol of community, hype-driven investing, and internet culture. Photo: Unsplash / Crystal Mapes

The culture behind the coins

Memecoin culture is sustained by more than speculation. It’s shaped by a constant exchange of memes, slogans, and shared experiences that create a powerful sense of belonging.

Koh pointed to the engagement that forms around absurd in-jokes like holding through dips, “diamond hands,” and being broke before the pump. “Rallying around a silly dog, frog, or absurd concept creates a powerful ‘us vs. them’ or ‘in-group’ feeling.”

This sense of unity is reinforced across online spaces. “Dedicated subreddits, Telegram, Discord groups, and X Spaces foster constant interaction, inside jokes, and hype-building,” he said. “The shared mission of ‘making it to the moon’ or ‘sticking it to the hedge funds’ unites members.”

Tripp echoed that view, describing it as “the feeling of a family or a belief in something bigger than them.” He added that coins are sometimes linked to charitable or mission-driven causes – “sometimes genuine, and sometimes marketing.”

Part of the appeal, Koh noted, comes from satire itself. “Users may enjoy mocking the complexity and self-importance of traditional finance and crypto.”

When emotion overrides logic

Tripp warned that emotional decisions often overpower rational thinking when it comes to memecoin investing. “A lot of people get caught up in the moment or hype without thinking rationally.”

“While some might do few analysis on liquidity, volume, and social trends, the core drivers are FOMO, greed, community belonging, and the fun of participation,” Koh said. “The most authentic thing about a memecoin is often the embrace of being a joke with no utility.”

Regardless, “if a coin crashes hard, accusations of being ‘just a marketing stunt’ or ‘rug pull’ surface,” he said.

After a crash, Koh said, communities tend to retroactively focus on utility or signs of legitimacy. “Awareness of scams makes people say they care, but FOMO often overrides this during a pump.”

He added that influencers and celebrities can act as powerful amplifiers. “A single tweet or mention from a big name like Elon Musk can instantly ignite buying frenzies and skyrocketing prices, with fear missing out on what ‘the smart money is doing’ surging.”

“Many influencers attract followers for the wrong reasons, only to fill their own wallets,” Tripp said.

High risk, high stress

Market swings, FOMO, and social pressure can turn trading into a source of stress, anxiety, and emotional fatigue. Photo: Unsplash / Tim Guow

The quick-shifting memecoin landscape, Tripp said, “can be devastating for some, where many people lose their income and savings.”

The psychological toll includes decision fatigue, impulse buys, chronic stress, anxiety, and a distorted sense of reality.

“Constant price action triggers dopamine hits on gains and adrenaline rushes on volatility, similar to gambling,” Koh said.

“Rapid changes force snap decisions," he added, "watching portfolios swing wildly is highly stressful, and quick pumps create unrealistic expectations of easy, continuous wealth.”

Red flags and risk awareness

Koh pointed to several warning signs to consider before joining any memecoin project – including anonymous teams and aggressive pressure to buy in.

Difficulty in buying or selling without significantly impacting the price is another red flag, especially when liquidity isn’t locked and funds can be drained instantly.

He also cautioned investors to be wary of sudden surges after a popular coin’s rise, often promoted heavily by unknown accounts.