All the scams and safety tips you need to know about when buying meme coins

We’ve all heard about cryptocurrencies like blockchain or Bitcoin. What’s much less well-known is how this market works, why individuals spend money on it, how they earn cash, and what errors can result in instantaneous damage. Our three posts on blockchain and cryptocurrencies, NFTs, and the metaverse cowl the crypto fundamentals. At the moment, we take a dive into a subject made scorching by Donald Trump’s victory within the U.S. presidential election: different cryptocurrencies comparable to meme cash.

For these with little time to spare, right here’s the TL;DR: Since 2021, the market capitalization of meme cash has fluctuated wildly between $8 billion and $103 billion, with towering ups and crashing downs. The possibilities of shedding cash enormously outweigh these of constructing it, and the variety of scams is excessive even by crypto market requirements. So the ethical is: don’t make investments cash that you would be able to’t afford to lose — even into one thing that bears the identify of the present U.S. President.

For these with slightly extra time on their arms, let’s check out some joke cryptocurrencies, discover what — if something — they’ve in frequent with NFTs, and let you know what precautions to take in case you’re decided to speculate on this high-risk market.

Try how meme-coin market capitalization has modified over the previous few years. Source

Meme cash and altcoins — what are they?

Technically, meme cash (aka meme tokens, meme cryptocurrencies) are a kind of altcoin; that’s — different cryptocurrencies. “Various” purely within the sense of not being the biggest and most widespread  of cryptoassets: Bitcoin and Ethereum. Traditionally, altcoins tended to be launched as unbiased blockchain platforms, however immediately they’re extra more likely to piggyback an current in style blockchain platform, comparable to Solana.

To get a way of the volatility of the meme coin market, examine the value and capitalization of sure randomly-chosen tokens in three weeks from late January (high) to mid-February (backside), 2025. Source

Of their issuance and circulation mechanisms, most altcoins provide holders some tangible advantages — from low charges and excessive transaction speeds to pegging to real-world belongings. Nevertheless, meme cash, of which Dogecoin was the primary, have been initially issued as a joke, and an opportunity to spend money on a fleeting social development — to point out one’s love for a meme, or assist for an actor, public determine, or media character. Though a meme coin is a cryptocurrency, its worth is set primarily by how enthusiastic persons are to spend money on it. Consequently, these crypto belongings are susceptible to sharp worth spikes, relying on who wrote what on social media, whether or not individuals appreciated an actor’s new film, and different such elements.

Meme cash and NFTs — similarities and variations

Each meme cash and NFTs use blockchain expertise to retailer possession data and transaction historical past. However in contrast to cryptocurrencies — the place any two cash are equal and interchangeable, similar to a few hundred-dollar payments, every particular person NFT is exclusive, and therefore the identify: non-fungible tokens. Every token secures possession of some distinctive digital asset — imparting collector worth to NFTs.

And since collector worth is essentially subjective, NFTs, like meme cash, are extremely prone to hype, hypothesis, and wild worth swings.

High meme cash

This part will age quick, however on the time of posting, the largest meme cash by market capitalization are Dogecoin (ticker image: DOGE), Shiba Inu (SHIB), Pepe (PEPE), OFFICIAL TRUMP (TRUMP), and Bonk (BONK) — with the primary exceeding $39 billion, and the final just under $1.5 billion. The TRUMP meme coin was nowhere within the neighborhood of this high record a month in the past — additional proof of simply how fickle this market is.

The pack chief, Dogecoin, nonetheless, is an actual survivor. Greater than a decade previous, its worth hovered between $0.0001 and $0.0002 for the primary two years, and infrequently nudged previous $0.01 within the following 4. Nevertheless, after being endorsed by Elon Musk in 2021, it briefly soared to $0.63, earlier than sinking to round $0.06. It spiked once more final November to over $0.4 after the presidential victory of the crypto-supporting Trump — over whom Musk seems to have some affect.

Worth dynamics of the oldest meme coin, Dogecoin (DOGE). Source

TRUMP, MELANIA, and BARRON

The brand new U.S. President’s household deserves a separate chapter in our story as a result of it completely illustrates the important properties of meme cash.

Simply three days earlier than taking workplace in 2025, Trump introduced the launch of his eponymous meme coin, which climbed to $75 in simply two days, then halved, and has been steadily falling over the previous three weeks — dropping to round $19 on the time of posting. Technically, TRUMP is issued on the Solana blockchain, with a complete “mintage” of 1 billion cash. Nevertheless, solely 200 million have been launched into circulation, whereas the remainder remained beneath the management of CIC Digital LLC and Battle Battle Battle LLC — each affiliated with the Trump Group.

Worth dynamics of the OFFICIAL TRUMP meme coin (TRUMP). Source

With the difficulty structured on this approach, the Trump Group can dictate each costs and demand, because it controls considerably extra cash than are on the open market. It may well earn cash by promoting cash at excessive costs — each saturating the market and driving costs down. Or it could select to not promote, and as an alternative anticipate an uptick in market sentiment to maximise earnings. Worth dilution as a consequence of elevated provide primarily hits those that purchased the cash at peak worth and hype — favoring each patrons who bought the cash cheaply, and people who issued the coin in query.

This method has drawn criticism from many within the crypto business, comparable to Nick Tomaino: “Trump proudly owning 80% and timing launch hours earlier than inauguration is predatory and plenty of will possible get damage by it”.

Blockchain evaluation agency Chainalysis confirmed that within the first few days after the launch, virtually 80% of the 600,000 patrons earned less than $100 on the token, and barely recouped their funding. Tellingly, 50% of TRUMP patrons have been crypto first-timers who had solely created a pockets and plunged into the market particularly for this deal.

Just a few weeks later, virtually all TRUMP buyers have been out of pocket. On the identical time, a choose group of 21 “whales” (patrons of 500,000+ tokens) made over $214 million within the first days of the meme coin’s circulation.

In all equity, the web site distributing the cash does state that purchasing them represents “an expression of assist for, and engagement with, the beliefs and beliefs embodied by the image $TRUMP”, and isn’t to be seen as an funding.

Two days after the TRUMP announcement, the First Girl adopted go well with with the launch of her personal meme coin. Having briefly risen above $12, only a day later MELANIA took a downward flip and spent a few days on the $3-5 vary, earlier than stabilizing at round $1.4. Simply because the MELANIA launch information broke, TRUMP plummeted.

Naturally, all this hullabaloo over “political” meme cash might hardly escape the eye of scammers. Blockchain platforms witnessed a mushrooming of tokens with TRUMP because the ticker image or within the description — regardless of having nothing to do with the “official” meme coin.

Probably the most eye-catching was the meme coin within the identify of the U.S. president’s youngest son, Barron Trump. Aided by a profile on the Pump.enjoyable web site (the place anybody can rapidly launch their very own meme coin) plus a handful of X posts pretending to be associated to an investigation and leaked insider info, in just some hours the unofficial meme token scored a market capitalization of $460 million. Nevertheless, when proof of “presidential” origin did not materialize, the token crashed by 95%.

Main meme coin and NFT scams

Rug pull (exit rip-off). The commonest rip-off related to newly-issued crypto belongings. Scammers mislead patrons in regards to the origins of a selected coin or NFT venture and the worth of the tokens, promote a bunch of them, and vanish. The bought tokens stay with the brand new homeowners however quickly depreciate. Within the case of meme cash, this scheme is commonly carried out with a celeb allegedly issuing their very own token, which later seems to be a hoax. Within the case of NFTs, patrons are promised non-existent privileges or collector worth. An notorious case was the Baller Ape Membership NFT, which led to one of many first indictments for NFT fraud. In line with Chainalysis, virtually one in 20 tokens issued in 2024 could have been rug pulls; whereas in 2021, these scams introduced crypto buyers a total loss of $2.8 billion.

“Namesake” assault. For simple identification on crypto exchanges and different crypto platforms, every token is assigned a singular code generally known as a ticker — similar to on conventional exchanges: BTC, USDT, TRUMP, and so forth. However in actuality, the shopping for and promoting of tokens relies not on tickers, however on lengthy, hard-to-read sensible contract addresses. A typical assault exploits this duality. Scammers create their very own tokens (altcoins) with a distinct contract deal with within the blockchain — however beneath the identical ticker as a well-liked token, for instance, TRUMP. Typically the scheme may even work when the ticker is completely different, and the big-draw identify merely seems within the coin description. Such tokens are sometimes launched on a distinct blockchain the place the unique coin isn’t traded. All these situations boil all the way down to the identical factor: the sufferer buys a very completely different crypto asset, which possible has no worth.

The web site promoting real TRUMP tokens states the related sensible contract deal with explicitly. Nevertheless, scammers can create a duplicate of the web site and publish a distinct sensible contract deal with

Honeypot tokens. These are tokens whose sensible contract doesn’t enable their sale. In different phrases, you’ll be able to make investments cash in them, however not withdraw it. This rip-off is commonly mixed with the “namesake” assault.

Drainers. Our separate post covers this risk intimately. Pondering they’re shopping for meme cash or NFTs, victims enter their credentials on a faux web site and have their crypto wallets emptied. The bait web site both mimics the official one, or affords a faux promotion comparable to a token airdrop.

Phishing and malware. Below the guise of social media posts by celebrities, messages from technical assist, and numerous different pretexts, attackers swindle non-public keys and seed phrases from crypto holders, in addition to set up malware on their computers and phones to siphon off crypto-related info. The end result is all the time the identical: the lack of all funds within the crypto pockets.

There are different, extra unique methods of stealing cryptocurrency: hacking old Bitcoin wallets through encryption algorithm bugs, fake hardware crypto wallets, and contaminated video games like Mario Forever or tanks.

There are even Robin Hood scams focusing on crypto thieves themselves. A juicy bait is dangled earlier than their eyes — for instance, “leaked” credentials of wallets supposedly containing hundreds of thousands of dollars or seed phrases for real crypto wallets — however after paying a “payment” to withdraw the funds, they uncover {that a} withdrawal isn’t attainable.

Our weblog is dwelling to dozens of other gripping detective stories about crypto scams. Sadly, the record is increasing day by day, so subscribe now to maintain updated with all the newest threats.

How to not lose cash on crypto, NFTs, and meme cash

1. Don’t spend money on crypto belongings you probably have any doubts about your monetary state of affairs or the steadiness of world markets, or don’t really feel sufficiently certified.
2. Don’t spend money on crypto belongings (or anything) what you’ll be able to’t afford to lose.
3. If you happen to want crypto belongings for cost functions, use cash with low volatility, comparable to USDT stablecoins, and don’t purchase extra crypto than you’ll want to settle the account.
4. If you happen to’re investing in crypto belongings for revenue, be ready to intently monitor the market dynamics and react rapidly. It is a day by day job, all of the extra so for meme cash — you’ll want to monitor social media developments and strike when the market is scorching. Cryptocurrency hypothesis (on meme cash particularly) could be very sturdy in Asia, so you might have to regulate your “buying and selling day” to the Far Japanese time zone.
5. Give choice to initiatives and tokens which have been in the marketplace for some time and earned a sure repute.
6. If shopping for a newly launched token, be sure it isn’t a rug pull or Ponzi scheme. It will require researching the repute of the venture creators and the token’s technical options. If the venture’s sensible contracts have been audited, research the outcomes. The shortage of such an audit isn’t a crimson flag per se, however it ought to put you in your guard. If it’s a meme coin linked to a celeb, have a look at their official social media accounts and profiles, and ensure they have been really concerned.
7. Purchase tokens on massive platforms which have inside requirements and adjust to authorized rules. Examples embrace Binance and Coinbase. When getting details about a token, particularly its sensible contract deal with, be sure you go to the official web site and never a faux. Don’t enter crypto pockets credentials, card particulars, or different delicate info on third-party websites.
8. Rigorously verify sensible contract and crypto pockets addresses to keep away from shopping for a “namesake”.
9. Watch out when looking for crypto-related websites, information, and social media accounts, and be cautious of messages despatched to you in electronic mail and messaging apps. Crypto buyers are frequent targets of phishing and pig butchering
10. Set up complete safety options on all of your units to guard in opposition to malware and web sites designed to steal crypto belongings. We advocate Kaspersky Premium, which affords further privateness safety and data-leak monitoring instruments, plus the built-in on-line cost safety system Safe Money.

The knowledge on this article is for informational functions solely and doesn’t represent funding recommendation. The devices mentioned could not match your funding profile, monetary state of affairs, funding expertise, or funding targets.