What do Moo Deng the pygmy hippo, social media sensation Hawk Tuah, and the President of the United States all have in common? They've all inspired highly valuable, highly volatile memecoins. The memecoin began as a sort of joke cryptocurrency, but it soon became very real.On today's episode of The Sunday Story, we turn to our friends at NPR's Planet Money to help us understand the phenomenon of memecoins. What are they, and how did they go from a one-off joke to a speculative frenzy worth tens of billions of dollars? Who are the winners and losers in this brazen new market?Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
Chapter 1: What are memecoins and why are they significant?
I'm Aisha Roscoe, and you're listening to the Sunday Story from Up First. So there are some things in this world that I just have a hard time getting my head around. And, you know, I've got to say one of them is cryptocurrency. And the longer it's around, the weirder and more complicated it seems to get. It's all a bit daunting to me.
But for some of my colleagues, explaining new trends in the economy is what they do. A few months ago, Planet Money host Alexi Horowitz-Gazi came across a viral video that clarified something about the explosion of a type of cryptocurrency called meme coins. These are highly valuable and highly volatile tradable currencies that have cropped up on the Internet over the past decade.
And anyone can make one. Here's Alexi talking about the video he saw and the story of one particular meme coin.
Chapter 2: How did a 13-year-old create and profit from a memecoin?
On the night of November 19th, 2024, this baby-faced kid, he looks around 13 years old, used a new online platform to launch a brand new cryptocurrency into the world. We're not using his name because he did all this anonymously.
The cryptocurrency he created is what's known as a meme coin, which is a kind of joke currency, something that doesn't hold any inherent value besides what other people on the internet are willing to pay for it. The kid named his coin Gen Z Quant. He spent a few hundred dollars to buy up about 5% of the total supply of his new coin. And then he also started live streaming on the platform.
Somebody else recorded the live stream, which is why in the video you can hear the kid and a couple other voices.
Are we bonded yet, or what's good?
In the video, you can both see the kid's face and a chart showing the coin's price. Within seconds, the list of people buying the coin starts to stream in, and the little green price line on the chart starts shooting upward. Like a rocket ship trying to reach escape velocity on its way to the moon. At first, the kid seems surprised.
Wait, what?
Wait, I'm so confused. But then he gets this kind of devious grin on his face. His cheeks start to get a little flushed. He moves his cursor over to a sell button on the website. And with one click, he cashes out the entirety of his holdings in Gen Z Quan. Some 51 million tokens for a cool $20,000 or so. There's a murmur of surprise from other people watching the live stream.
In the chat, a little burst of fire emojis starts popping off. And the price of Gen Z Quant then immediately collapses. The green line on the price chart turns red and takes a nosedive. And for a moment, the kid again seems shocked at what he's been able to do. Holy f***! Holy f***! And then the kid makes it clear. He is not, in fact, so confused. He seems to know exactly what's happening.
He extends both of his middle fingers to the camera and utters a line that's become kind of infamous in the crypto world. Thanks for the 20 bandos. Thanks for the 20 bandos. Thanks, in other words, for the $20,000 or so that this group of total strangers on the internet had just transferred right into his account.
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Chapter 3: Where did the idea for Dogecoin originate?
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We're back with the Sunday story. Today, a deep dive into meme coins from our colleagues over at Planet Money. Here's NPR's Alexi Horowitz-Ghazi with freelance reporter Nick Nevis.
Hello, Alexi. Hello. Yes. Over the past few months, you and I have been on a deep dive into the world of meme coins. We've been spelunking in the crypto mines. We've been getting lost in them because over the past decade, meme coins have gone from a one-off joke to a speculative frenzy worth tens of billions of dollars.
Today on the show, the story of the meme coin casino. How a few technological leaps and cultural shifts helped turn a seedy internet backwater into a giant cryptocurrency gold rush. OK, so in order to tell the story of how we got to this moment where we are constantly awash in new meme coins, we have to begin at the beginning. And in the beginning, of course, there was Bitcoin.
Bitcoin was launched in 2009 and it was pitched as a sort of utopian alternative to government backed currencies. It was a way for people to pay each other without having to rely on the existing financial system.
But in the years after its launch, there was also this whole wave of often sketchy new Bitcoin copycats. And this is where you start to see this pattern develop that's characterized the world of cryptocurrency ever since. A cycle of grand utopian promises followed by a period of frenzied speculation and outright fraud.
And this was the seedy state of crypto that inspired what is widely considered to be the first meme coin, Dogecoin.
The story starts back in 2013 with a guy named Jackson Palmer. Palmer was an Australian product manager at a tech company, and he believed that there was something fundamentally useful about what crypto promised to do. But when he looked around at some of these speculative new cryptocurrencies, he saw that people seemed to be using crypto as a kind of cash grab.
Basically, some people were running what are known as pump-and-dump schemes.
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Chapter 4: How did Ethereum change the landscape of cryptocurrency?
What do you do when you're not digging into the smarmy back corners of the crypto world?
I've got three little kids, so I like to hang out with them. And I hope they never get into meme coins.
Yes, keep them quarantined. Zeke says that first revolution that helped spawn our meme coin filled moment was a cultural one. The one where Dogecoin helped marry the world of memes to the world of crypto. But the second revolution was a technological leap. It came a few years later with the invention of a brand new blockchain called Ethereum.
So a blockchain is basically a ledger that everyone can see, and it keeps track of how many tokens someone has of a given cryptocurrency. It used to be that in order to make a new cryptocurrency, you had to code up a new blockchain. So Bitcoin had its own blockchain. Dogecoin had a different one. But Ethereum made it so that you could keep track of multiple cryptocurrencies on the same blockchain.
You could just create a new coin right on top of Ethereum's underlying infrastructure.
And this new Ethereum blockchain helped set off a massive surge in new cryptocurrencies starting around 2017 or so. They were called initial coin offerings or ICOs. And these coins were often framed as useful new technologies, cryptocurrencies that would have some sort of real world utility.
This was the time when people were still really pitching blockchain as like the solution to all the world's problems. So in general, these ICOs were like, it's the blockchain for dentists, or this is going to be the blockchain that helps track agriculture.
It's Bitcoin for farmers. Yeah.
But people are basically trading them just on hype. And studies afterwards found that something like three quarters of all the ICO's initial coin offerings were scams or fraud.
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Chapter 5: What role did COVID-19 play in the rise of meme stocks?
Crypto winter, some might call it.
Yeah.
So how do we go from crypto's dark night of the soul to an era teeming with more meme coins than we can keep track of? And who are the winners and losers of this brazen new world? That's coming up after the break.
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Okay, so at this point, we've seen the same pattern play out over and over in the world of crypto. There's a rush of utopian promises, followed by a speculative rush of shady investments, followed by a sobering collapse as all the sketchy stuff is revealed.
Dogecoin, you'll remember, was first invented as a cheeky response to the wave of sketchy Bitcoin copycats. And you can think of the current memecoin moment as a sort of like doubling down on the joke.
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Chapter 6: What is Pump.Fun and how is it influencing the memecoin market?
Uh, it's this, it's got a martini.
It's a squirrel with a martini glass.
Wow. This seems like it has a lot of meme coin potential.
Definitely.
So what should we call it?
Well, there's either animal spirits or there's PM squirrel coin.
PM squirrel coin. Okay. So the ticker will be PMSC.
Naturally.
For the description, this is the planet money squirrel. Does that sound good?
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