Gambling with Memes

Summary

Summary of "Gambling with Memes" Episode from Up First by NPR

Release Date: March 30, 2025
Hosts: Leila Fadel, Steve Inskeep, Michel Martin, A Martinez, Ayesha Rascoe, Scott Simon
Episode Title: Gambling with Memes

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1. Introduction to Meme Coins

The episode delves into the burgeoning phenomenon of meme coins—cryptocurrencies inspired by internet memes that have surged in popularity over the past decade. These digital assets are characterized by their high volatility and the ease with which anyone can create and launch them online.

Notable Quote:

Alexi Horowitz Ghazi [00:00]: "Cryptocurrency is becoming more complicated and daunting, yet meme coins are taking the Internet by storm."

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2. The Gen Z Quant Scam: A Case Study

A focal point of the discussion is the story of a 13-year-old anonymous creator who launched a meme coin named Gen Z Quant. Utilizing a live-streaming platform, he rapidly sold a portion of his coin holdings, accruing approximately $20,000 before the coin's value plummeted.

Notable Quotes:

Nick Nevis [02:03]: "Thanks for the 20 bandos."
Alexi Horowitz Ghazi [02:46]: "Holy. Holy."
Nick Nevis [03:24]: "We're living at a time where a 13-year-old can create his own cryptocurrency and rip off strangers for tens of thousands of dollars in one night."

This incident exemplifies the unchecked nature of the meme coin market, likened to a "wild west" environment devoid of stringent regulatory oversight.

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3. The Evolution of Meme Coins

a. The Birth of Dogecoin and Jackson Palmer's Intentions

The narrative traces back to 2013 with the creation of Dogecoin by Jackson Palmer, an Australian product manager. Originally intended as a humorous alternative to Bitcoin, Dogecoin quickly garnered a community focused on charitable donations. However, Palmer expressed regret as Dogecoin became a vehicle for speculative pump-and-dump schemes, contradicting his original philanthropic intent.

Notable Quotes:

Jackson Palmer [09:24]: "Doge, that's hilarious."
Jackson Palmer [10:35]: "I feel guilty enough for creating Dogecoin, knowing people have lost money because of it."

b. Technological Advances: Ethereum's Impact

The introduction of Ethereum revolutionized the cryptocurrency landscape by allowing multiple tokens to operate on a single blockchain. This technological leap significantly lowered the barriers to creating new cryptocurrencies, spurring a proliferation of meme coins through Initial Coin Offerings (ICOs).

Notable Explanation:

Aisha Rascoe [11:20]: "Ethereum made it so that you could keep track of multiple cryptocurrencies on the same blockchain, enabling easier creation and launch of new coins."

c. The Cultural Shift During COVID-19

The COVID-19 pandemic catalyzed a cultural shift as day traders, confined by lockdowns, flocked to meme stocks like AMC and GameStop. This era saw the convergence of meme culture with financial markets, further fueling interest in meme coins alongside the rise of mainstream crypto exchanges such as FTX and Coinbase.

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4. Pump Fun: The Meme Coin Launchpad

Pump Fun emerged as a pivotal platform in the meme coin ecosystem by simplifying the creation process to a point-and-click experience. Launched in January 2024 by three London-based entrepreneurs, Pump Fun democratized meme coin creation, leading to over 5 million coins being birthed within its first year.

Notable Quotes:

Unnamed Meme Coin Trader [18:35]: "Pump Fun made it incredibly easy to create new meme coins, with the homepage constantly showcasing newly launched coins."
Nick Nevis [21:33]: "We did not in fact launch the Planet Money Squirrel coin. Not today, Satan. But it was a shockingly easy prospect."

Pump Fun also incorporated social features like live streaming to assist creators, though this led to chaotic and often malicious promotional tactics, prompting the platform to disable certain features to curb the ensuing mayhem.

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5. The Influence of Key Opinion Leaders (KOLs)

Influencers and high-profile figures wield significant power in the meme coin market. Elon Musk, in particular, has been dubbed the "Meme coin market mover in chief," with his endorsements often triggering substantial price movements. These Key Opinion Leaders (KOLs) either genuinely support or are paid to promote certain coins, effectively shaping market trends through their vast followings.

Notable Quote:

Alexi Horowitz Ghazi [25:03]: "Elon Musk is like the Meme coin market mover in chief."

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6. The Economics of Meme Coins: A Zero-Sum Game

The episode highlights the inherently zero-sum nature of meme coin trading, where the majority of participants lose money while a small fraction (approximately 3%) manage to secure profits. This dynamic fosters a "greater fool" mentality, where investors buy into meme coins with the expectation that someone else will purchase them at a higher price in the future.

Notable Quotes:

Nick Nevis [28:20]: "Only 3% of traders on Pump Fun ever made $1,000."
Unnamed Meme Coin Trader [29:27]: "This is just gambling. Everyone involved would agree with that, I think."

This structure benefits platforms like Pump Fun, which profit by taking a percentage of every transaction, regardless of the overall market outcome.

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7. Conclusion: Meme Coins as Modern-Day Casinos

The episode concludes by framing meme coins as contemporary gambling ventures, where hype and influencer endorsements replace traditional financial valuations and analysis. The combination of easy creation tools, potent influencer impacts, and the herd mentality among investors perpetuates a volatile and often exploitative market environment.

Notable Quote:

Aisha Rascoe [29:16]: "Why do so many people continue to invest in a system that feels so clearly rigged against them?"

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Final Thoughts

"Gambling with Memes" offers a comprehensive exploration of the meme coin phenomenon, tracing its roots from Dogecoin's inception to the current landscape dominated by platforms like Pump Fun. Through engaging storytelling and insightful analysis, the episode underscores the precarious and speculative nature of meme coin investments, inviting listeners to reflect on the broader implications of this digital financial frontier.

Transcript

[Aisha Rascoe]

Aisha.

[Alexi Horowitz Ghazi]

I'm Aisha Rascoe 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 Ghazi 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 and the story of one particular meme coin.

[Nick Nevis]

On the night of November 19, 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 livestreaming 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.

[Alexi Horowitz Ghazi]

Are we bonded yet or what's good?

[Nick Nevis]

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.

[Alexi Horowitz Ghazi]

Wait, what?

[Nick Nevis]

He said, wait, 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 ZQuant, some 51 million tokens for a cool $20,000 or so. There's a murmur of surprise from other people watching the livestream 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.

[Alexi Horowitz Ghazi]

Holy. Holy.

[Nick Nevis]

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.

[Alexi Horowitz Ghazi]

Thanks for the 20 bandos.

[Nick Nevis]

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. The kid then stands up, starts tugging at his hair, and just takes a moment to revel in what he's pulled off. Yo. Yo, yo y yo.

[Alexi Horowitz Ghazi]

What the.

[Nick Nevis]

And I think maybe the most absurd part of all this is that the kid then goes on to pull this exact same move two more times with two other meme coins he created that very same evening, netting over $50,000 in total. No, no, no, no, no, no, no, no, no, bro. And when you take a step back and just think about what's happening here, it's kind of wild, right? We're living at a time where a 13 year old can create his own cryptocurrency, successfully hawk it to a bunch of strangers on the video, and then rip them off for tens of thousands of dollars, not once, not twice, but three times in one night, all from the comfort of his own home, and all before bedtime. If someone pulled this move on a market like the New York Stock Exchange, they might have had government regulators knocking on the door. But meme coins are kind of a wild west. And the thing is, what this one kid did is just a tiny glimpse into this much bigger economic story. Just one example of a transformation rippling across the intern. There are thousands of these meme coins being launched every single day now, involving everyone from literal children to social media sensations like Hoktua or Mu Dang the Pygmy Hippo to the President of the United States. It's the kind of thing that makes you wonder, how in the world did we get here?

[Alexi Horowitz Ghazi]

Today on the Sunday Story, Planet Money host Alexi Horowitz Ghazi and freelance reporter Nick Nevis explained. Explain just how we got here. Stay with us.

[Zeke Fox]

Support comes from our 2025 lead sponsor of Upfirst, Amazon business. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business. From fast free shipping to in depth buying insights and automated purchase approvals, they deliver everything you need to achieve your goals. It's not easy to stand out from the crowd. Simplify how you stock up to get ahead. Go to amazonbusiness.com for support. This message comes from Bombas. Nearly 30% of marathoners end their race. Blistered Bombas running socks are strategically cushioned to help. Say bye to blisters. Run to bombus.com NPR and use code NPR for 20% off your first purchase.

[Nick Nevis]

This message comes from BetterHelp. Therapy can be expensive, but at BetterHelp, they believe therapy should feel accessible, not like a luxury, which is why they offer quality care at a price that makes sense and can help you with anything from anxiety to everyday stress. Your mental health is worth it and now it's within reach. Visit betterhelp.com NPR to get 10% off your first month. That's betterhelp.com NPR we're back with a.

[Alexi Horowitz Ghazi]

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.

[Aisha Rascoe]

Hello, Alexi.

[Nick Nevis]

Hello.

[Aisha Rascoe]

Yes. Over the past few months, you and I have been on a deep dive into the world of meme coins.

[Nick Nevis]

We've been spelunking in the crypto mines.

[Aisha Rascoe]

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 doll.

[Nick Nevis]

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. Okay. 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.

[Aisha Rascoe]

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.

[Nick Nevis]

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.

[Aisha Rascoe]

And this was the seedy state of crypto that inspired what is widely considered to be the first meme coin dogecoin.

[Nick Nevis]

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 seem to be using crypto as a kind of cash grab. Basically, some people were running what are known as pump and dump schemes.

[Aisha Rascoe]

Here's how it would work. Some programmers would create a new coin. They'd hype it up as the next bitcoin, maybe do some sketchy stuff to fake demand and get people to buy in, all to pump up the price. And when enough money had flowed in, they would sell off all their coins, they would dump their holdings, the price would collapse, leaving everyone who'd bought in holding the bag.

[Nick Nevis]

As Palmer looked around, he thought crypto was turning into kind of a joke. So why not turn it into an actual joke? He described how he came up with the idea in an interview with our daily podcast, the indicator. Back in 2018, I'd come home for.

[Jackson Palmer]

The day in an Australian kind of tradition, you know, cracked open a beer, and I was just sitting around. And the way it kind of came together was that I had one browser tab open with this article about Doge, and right next to I had CoinMarketCap, which is a very popular website for checking the valuations of cryptocurrencies. So my tab names kind of almost spelled it out for me in a way. And I just thought, dogecoin, that, that's hilarious.

[Nick Nevis]

Doge, you may remember, was this super popular Internet meme built around the image of a dog, a quizzical looking shiba inu, and it was paired with these kind of grammatically challenged captions, like such, wow. And much amaze.

[Aisha Rascoe]

Palmer and a friend coded up a new coin, and in doing so, they married the world of memes with the world of crypto.

[Nick Nevis]

For Palmer, dogecoin was an attempt at convincing the crypto curious to make more rational investment decisions. But instead, the good people of the Internet decided to pull a giant irreverent yes. And to Palmer's joke coin, they started buying more and more of them. Palmer was surprised, and at first, he went along for the ride. He and a community of fellow crypto jokesters donated their increasingly valuable Dogecoins to charity. And for a while things were going well.

[Jackson Palmer]

But whenever you have something that's going really successful, you have a successful community like that, and there's a monetary element to it. It's like blood in the water, right? Like sharks can, like, smell it from miles away.

[Aisha Rascoe]

And pretty quickly, fraudsters started to use dogecoin in the kind of pump and dumps it was meant to critique, which was exactly the opposite of what Palmer had intended.

[Jackson Palmer]

Yeah, tell me about it.

[Nick Nevis]

Right.

[Jackson Palmer]

The, the, the irony is definitely, definitely not lost on me. You know, I feel guilty enough for creating dogecoin, which I'm sure that, that people have at some, you know, I know that people have lost money on in the past and that, and that pains me.

[Nick Nevis]

In the years that followed its creation, Dogecoin ended up spawning dozens of copycat cryptocurrencies, or copy doges, I guess, in this case. But the number of these new meme coins was still limited by the technical expertise someone needed to make one. You needed to be able to essentially copy and tweak Bitcoin's code.

[Aisha Rascoe]

And to understand how that barrier to entry started to change, we called up Zeke Fox. Zeke is an investigative journalist at Bloomberg and author of the book Number Go Up Inside Crypto's Wild Rise and Staggering Fall.

[Nick Nevis]

What do you do when you're not digging into the smarmy back corners of the crypto world?

[Unnamed Meme Coin Trader]

I've got three little kids, so I like to hang out with them and I hope they never get into meme coins.

[Nick Nevis]

Yes, keep them, 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.

[Aisha Rascoe]

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.

[Nick Nevis]

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.

[Unnamed Meme Coin Trader]

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.

[Nick Nevis]

It's bitcoin for farmers.

[Unnamed Meme Coin Trader]

Yeah, but people are basically trading them just on hype. And studies afterwards found that something like 3/4 of all the ICO's initial coin offerings were scams or fraud.

[Nick Nevis]

You can see that same quintessential pattern playing out again here. An era of utopian promises turning into a whirlwind of fraudful deceit.

[Aisha Rascoe]

Yet Zeke says this round of crypto speculation was also limited in its impact because the majority of investors just did not understand the basics of transacting on the blockchain, like how to set up your own crypto wallet or trade coins.

[Nick Nevis]

But then came the third revolution. That helps explain how we got to our current meme coin moment. And this one had both a cultural element and a technological one. The cultural part happened around the time of the COVID 19 lockdowns, when a bunch of bored day traders stuck at home started banding together to buy meme stocks. Companies like AMC and GameStop. This was the marriage of meme culture and the entire stock market.

[Aisha Rascoe]

The technological part was the rise of mainstream crypto exchanges like FTX and Coinbase. These platforms made it easier for retail investors to buy and sell cryptocurrencies. And that helped swell the market to.

[Unnamed Meme Coin Trader]

New heights during that huge crypto bubble of like 2021, 22. There certainly was some meme coin trading, but it was not the focus of cryptocurrency traders.

[Aisha Rascoe]

The rise of the meme coin was still to come. Most crypto bros were still focused on mainstream cryptocurrencies like bitcoin and ether. And the most radical speculators were obsessing over things like non fungible tokens or NFTs. Like those weirdly expensive Bored Ape cartoons.

[Nick Nevis]

People were buying apes together.

[Aisha Rascoe]

Strong planet of the speculative ape investments.

[Nick Nevis]

Exactly. But as we have learned in the cyclical history of crypto, number that go up must eventually come down. Which is exactly what happened in November of 2022. That's when it was revealed that the founder of crypto exchange ftx Sam Bankman Fried had been secretly using billions of dollars of customer funds to make massive risky bets.

[Unnamed Meme Coin Trader]

In winter 2022, FTX collapses. And that's like the nadir of the crypto market.

[Nick Nevis]

Crypto Winter, some might call it.

[Unnamed Meme Coin Trader]

Yeah.

[Nick Nevis]

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.

[Zeke Fox]

This message comes from Progressive Insurance. Progressive makes it easy to see if you could save when you bundle your home and auto policies. Try [e-mail] Progressive Casualty Insurance Company and affiliates. Potential savings will vary. Not available in all states. This message comes from Thuma. Create your oasis with Thuma, a modern design company that specializes in furniture and home goods by stripping away everything but the essential. Thuma makes elevated beds with premium materials and intentional details with clean lines, subtle curves, and minimalist style. The Thuma Bed Collection is available in four signature finishes to match any design aesthetic. To get $100 towards your first bed purchase, go to T H U M A CO NPR this message comes from Progressive Insurance. You chose to hit play on this podcast today. Smart choice. Make another smart choice with Autoquote Explorer to compare rates for multiple car insurance companies all at once. Try [e-mail], progressive Casualty Insurance Company and affiliates not available in all states or situations. Prices vary based on how you buy.

[Nick Nevis]

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 this sketchy stuff is revealed.

[Aisha Rascoe]

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 meme coin moment as a sort of like, doubling down on the joke when.

[Nick Nevis]

Crypto exchange FTX collapsed, bringing down the whole crypto market along with it. It was like the ultimate Emperor's New Clothes moment. Even Sam Bankman Fried, the person who seemed to be the face of crypto going legit, turned out to have committed fraud to the tune of billions of dollars. In light of that, some crypto traders stopped believing in any promise of the technology's underlying value. They started to see it as pure, irreverent speculation.

[Aisha Rascoe]

And early last year, that sort of nihilistic feeling fused with yet another technological leap forward. Zeke Fox says This time in the form of a new website.

[Unnamed Meme Coin Trader]

The latest meme coin craze was really enabled by this new trading platform called Pump Fun that made creating a meme coin a point and click experience. And more than 5 million coins have been created in, like, the year that it's existed.

[Nick Nevis]

Pump Fun is a bit shadowy, but as far as we can tell, it was created in January of 2024 by three entrepreneurs in their early twenties in London. We reached out to Pump Fun, but they didn't get back to us.

[Aisha Rascoe]

And the idea behind the platform was basically to demolish the barrier to entry for people making new meme coins to create a place where people could launch and then promote their own coins as a sort of social media experience.

[Nick Nevis]

Let's go to Pump Fun. Will you give us a little safari?

[Unnamed Meme Coin Trader]

Yes, definitely.

[Aisha Rascoe]

Zeke took us on a little tour of the Pump Fun. It looks a bit like a throwback to the Flash websites of the 90s. All bright neon text and JPEGs of memes.

[Unnamed Meme Coin Trader]

I know, it's like, seems like something that only a child could enjoy.

[Nick Nevis]

Maybe a man child.

[Unnamed Meme Coin Trader]

I think there's a lot of kids.

[Nick Nevis]

On there, some who've made a lot of money.

[Aisha Rascoe]

Dump Fun has made it so incredibly easy to make new meme coins that the homepage is just constantly updating with images of coins that have just been born, coin after coin after coin.

[Unnamed Meme Coin Trader]

I'm looking at their most recent coins and, you know, there's. What if we all hold. 27 seconds ago dogenoid46 seconds ago leader of hats 1 hour ago what's the.

[Nick Nevis]

Kind of meme coin leaderboard today?

[Unnamed Meme Coin Trader]

Like, some of these ones just sort of become like, classics and they keep trading. Like, dogecoin is still top dog. I'm sorry.

[Nick Nevis]

Top doge.

[Aisha Rascoe]

That was completely inevitable.

[Unnamed Meme Coin Trader]

Shiba Inu, which is like a dogecoin ripoff, is very high up there. Pepe Dog Whiff hat has proven to have some staying power. But I think Fartcoin is the hottest meme coin right now.

[Nick Nevis]

Fart coin's going to the moon.

[Unnamed Meme Coin Trader]

Yeah. I mean, Fartcoin, to me, it's like, how is this even funny? And so I was asking my favorite meme coin trader source about this. I was like, do you think it's funny? And he said, sometimes the fact that they're not funny is what's funny.

[Nick Nevis]

It's like horseshoe meme theory.

[Unnamed Meme Coin Trader]

Yeah.

[Nick Nevis]

Pump Fun is a place where the newest juvenile inside jokes of the Internet can be transformed almost instantaneously into tradable financial instruments. And so you can see the stream of new coins on the site as the cutting edge of what wannabe meme coin millionaires think might go viral.

[Aisha Rascoe]

Irreverent Internet culture meets the market.

[Nick Nevis]

Could anything possibly be more Planet Money than that?

[Unnamed Meme Coin Trader]

Should we make a coin and find out?

[Nick Nevis]

Let's go right to the edge of making a coin and then hover on the edge.

[Unnamed Meme Coin Trader]

What do you think? Should it be a cute animal?

[Nick Nevis]

Yeah, I mean, our mascot is the squirrel from the T shirt project.

[Unnamed Meme Coin Trader]

Oh, where can I get this squirrel? Do you want to. I brought a picture of my cat, but we can use the squirrel.

[Nick Nevis]

Yeah, just type into Google, type in Planet Money Squirrel.

[Unnamed Meme Coin Trader]

Uh, it's got a martini.

[Nick Nevis]

It's a squirrel with a martini glass.

[Unnamed Meme Coin Trader]

Wow. This seems like it has a lot of meme coin potential.

[Nick Nevis]

Definitely.

[Unnamed Meme Coin Trader]

So what should we call it?

[Nick Nevis]

Well, there's either Animal Spirits or there's PM Squirrel Coin.

[Unnamed Meme Coin Trader]

PM Squirrel Coin. Okay, so the ticker will be pmsc, naturally, for the description. This is the Planet Money squirrel. Does that sound good?

[Nick Nevis]

Oh God, we're playing with fire. We could launch a coin that just gets out of our hands.

[Unnamed Meme Coin Trader]

Just so you know, you can never take it back.

[Nick Nevis]

We did not in fact launch the Planet Money Squirrel coin. Not today, Satan. But it was a shockingly easy prospect. By filling out a few description details and uploading a copy and pasted image from the Internet, you too can be the proud, terrified parent of a new meme coin. But raising that coin to a monstrously profitable adulthood is not so easy.

[Aisha Rascoe]

Because you can think of Pump Fun as this hyper literal attention economy. If a coin creator can't generate enough excitement around their meme coin, they won't be able to ensnare enough buyers to get it to take off.

[Unnamed Meme Coin Trader]

It's very easy to create the coin, but what's hard is attracting attention for it.

[Nick Nevis]

Now, there are three basic ways people garner attention in this world. And it comes down to how much clout the person might have for the first group. For the people who are cloutless in Cryptoland, Pump Fun offered a solution. It had a livestream feature. So a no name new coin creator could try to build a following by basically carnival barking the merits of their meme coin in real time.

[Unnamed Meme Coin Trader]

So Pump Fun had like a built in feature where the creators of the tokens could live stream themselves to promote their coins. And this went downhill fast. People were doing like really gross things to try to get attention. There was someone claiming that they had kidnapped the developer of the coin and would torture them. Oh God, somebody Killed a chicken.

[Nick Nevis]

Dark.

[Unnamed Meme Coin Trader]

Somebody held a gun to a fish. A kid had his mom flash the livestream one that was a little sillier. This kid created a coin. He was livestreaming while he was streaming. He took the money and then gave the camera double middle fingers and said thanks for the 20 bandos in a high pitched voice.

[Aisha Rascoe]

That of course is the precocious and a little devious 13 year old from the beginning of our story.

[Alexi Horowitz Ghazi]

Thanks for the 20 bandos.

[Nick Nevis]

Pump fun eventually took down the livestream function from its website in response to all of this mayhem. Sort of a classic case of this is why we can't have nice things.

[Aisha Rascoe]

So that's the first group, the people without much clout who have to find some way to grab attention for their meme coin. Now there's a second group of meme coin creators and their big strategy is to already be famous.

[Unnamed Meme Coin Trader]

And we've mostly seen kind of like C Listers do this. Iggy Azalea launched a coin on Pump Fun. And that one, for a long time I was seeing people, I guess maybe mostly Iggy Azalea herself tweeting about her mother coin. Caitlyn Jenner had one.

[Nick Nevis]

There was the ill fated Hoktua coin, which crashed just hours after it launched. And perhaps the most famous or infamous of all the new meme coins was the one launched by President Donald J. Trump.

[Aisha Rascoe]

But the third and final group of meme coin creators are the real power players. These are the shadowy groups of, well, resourced insiders who know how to play the game.

[Nick Nevis]

Because there's this whole ecosystem of crypto influencers on places like discord X, TikTok, YouTube. And if these influencers start talking about.

[Unnamed Meme Coin Trader]

A coin, their followers will start to buy. Because these people have a track record of talking about coins kind of early on. And the coins going on to attract even more attention.

[Alexi Horowitz Ghazi]

This meme is so fire, it's going to burn the Internet down.

[Jackson Palmer]

Guys, I think this meme coin could.

[Alexi Horowitz Ghazi]

Pull some crazy numbers.

[Nick Nevis]

And now today, this coin is already.

[Aisha Rascoe]

About to hit 800k market cap and.

[Nick Nevis]

Break through a mill.

[Unnamed Meme Coin Trader]

And in crypto, these influential people are called KOLs, which stands for key opinion leader. And those people are often paid to promote the coins. And some people will tell their followers, I'm getting paid to promote this coin and other people will not.

[Nick Nevis]

Zeke says there is one key leader whose opinion seems to be valued above all others in the world of meme coins, a man who has taken the joke so far as to helm a controversial new government entity named after that.

[Unnamed Meme Coin Trader]

Original Doge meme, what is really ideal is if Elon Musk will talk about whatever the coin is about.

[Aisha Rascoe]

Like one of the big reasons Dogecoin is still the most valuable meme coin is because Elon Musk started tweeting about it in 2019.

[Unnamed Meme Coin Trader]

But it's not just Dogecoin. A lot of the most successful coins have had some connection to Elon Musk.

[Nick Nevis]

Elon Musk is like the Meme coin market mover in chief.

[Unnamed Meme Coin Trader]

Yes, because the people who are trading these are watching patterns and they're saying, hey, last time Elon Musk talked about something, the coin went up, so maybe it'll happen this time. And then that kind of becomes a self fulfilling prophecy.

[Nick Nevis]

Now, regardless of which kind of meme coin creator we're talking about, the goal on Pump Fun is generally the same. Whether you are a 13 year old boy or a C list celebrity or a crypto insider, what you want is for your Meme coin to blast off. You can think of the site as a kind of massive launchpad, like a giant Cape Canaveral, but a lot of it is filled with the skeletal remains of Meme coins that have failed to launch.

[Unnamed Meme Coin Trader]

Something like 99% of coins are dead.

[Nick Nevis]

On arrival, which means they basically have zero buyers, Right?

[Unnamed Meme Coin Trader]

Like, I bet you a lot of them never sell a single token.

[Nick Nevis]

But if a coin creator can get enough key opinion leaders on board, they might get some initial price liftoff. Because this whole hoard of key opinion followers might hop on the rocket in the hopes that they can hop off before the price collapses.

[Aisha Rascoe]

And if they can get enough price liftoff, their coins will graduate from Pump Fun to bigger platforms with whole new groups of potential buyers, like one platform aptly named Moonshot, to the biggest exchanges like Binance and Coinbase.

[Nick Nevis]

The hope for the truest Meme coin believers is that their coin will somehow manage to breach escape velocity and make it all the way to the financial moon, maybe even Mars, to join the Doges and Pepe coins of yore.

[Aisha Rascoe]

But regardless of whether a coin dies on the launchpad or makes it to the moon, there's one group that makes money no matter what. Because Pump Fun gets a 1% cut of every trade made on the platform.

[Unnamed Meme Coin Trader]

Right? And Pump Fund this platform, in just a year or so, Dune analytics, which is a blockchain analysis company, says that it's made $400 million in fees.

[Nick Nevis]

So just like as in a casino on Pump Fund, the house also always wins. Yeah, but if you are somehow coming away from all of this with the impression that meme coin millionaires are being minted all the time. Zeke says that is exactly the fear of missing out that fuels this whole market.

[Unnamed Meme Coin Trader]

What everyone wants is that next one that's going to go up 10x100x1000x. And they're the stories of people who really have made a million bucks because they bought dog whiff hat early. And when somebody hears that, it's pretty powerful, creates this sense of fomo. But Dune analytics studied blockchain data and found that only 3% of traders on Pump Fun ever made $1,000.

[Nick Nevis]

And keep in mind, meme coin trading is a zero sum game. Every dollar someone makes on a Meme coin mathematically has to come at the expense of someone else buying it. Which means that this tiny minority of winners, that 3% of traders, is making their fortunes off the vast majority of meme coin investors.

[Aisha Rascoe]

Which raises the enormous question, why do so many people continue to invest in a system that feels so clearly rigged against them? Why do people still invest in meme coins?

[Nick Nevis]

In your mind, is this, Is this all just a giant casino? Like, is this just like an ancient practice of sometimes irrational gambling, like, just updated and put onto the blockchain?

[Unnamed Meme Coin Trader]

I mean, I definitely would say this is just gambling. Everyone involved would agree with that, I think. But it's a really weird form of gambling. And oftentimes, by the time that you or I hear about any coin, you know, the insiders have probably accumulated a big supply at a low price and they're just waiting for losers like us to hear about it and buy some so that they can sell theirs and get real money.

[Nick Nevis]

In a way, a lot of what's going on here feels like a new twist on the classic pump and dump scheme.

[Aisha Rascoe]

But instead of people promising financial gains based on some underlying value, these days, many meme coin boosters are just promising that there will be enough other chumps out there to cash you out when the time comes.

[Nick Nevis]

Call it a chump and dump.

[Unnamed Meme Coin Trader]

Now, I think that most of the people who buy this like they're not being fooled by the coins. They just think that, hey, I am not the last person who's going to buy this coin. Someone else will come along later and buy this coin for more.

[Nick Nevis]

Has anyone made a Greater fool coin?

[Unnamed Meme Coin Trader]

I guarantee that they have.

[Nick Nevis]

And in fact, when we checked the Pump Fun registry, there turned out to be no less than 12 competing greater fool Meme coins, half of them with the ticker sign Fool.

[Alexi Horowitz Ghazi]

Justine Yan produced this episode of the Sunday Story. The original Planet Money episode was produced by Willa Rubin and edited by Jess Jiang, with help from Keith Romer, fact checking by Cierra Juarez and engineering by Neal Rauch. The Sunday Story team also includes Andrew Mambo, Jennifer Schmidt and Liana Simstrom. Our executive producer is Irene Noguchi. I'm Aisha Rascoe. Up first we'll be back tomorrow with all the news you need to start your week. Until then, have a great rest of your weekend.

[Zeke Fox]

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