In the ever-evolving landscape of cryptocurrency, a strange phenomenon has taken center stage: memecoins. These quirky, often whimsical digital assets have surged in popularity, capturing the attention of investors and traders alike with their astronomical gains.

In recent weeks, memecoins have experienced a staggering rally, outpacing traditional cryptocurrencies and boasting gains of over 3x to 5x in some cases. This surge has sparked a frenzy of excitement and speculation within the crypto community, as enthusiasts scramble to ride the wave of meme coin mania.

In this article, we delve into the factors driving the explosive growth of memecoins and explore what the future may hold for this unconventional corner of the crypto market.

A meme is a cultural element, often in the form of an image, video, or phrase, that spreads rapidly through the Internet and is usually humorous, satirical, or relatable, often evolving or mutating as it is shared and adapted by users. Memes can spread like wildfire through social media, specifically if the social consensus agrees that the meme is funny.

Now, memecoins are exactly what they sound like, crypto tokens created in the image of a meme. They too can be contagious if the underlying meme resonates with token holders, and social sentiment is the main price driver for memecoins.

Just take a look at Dogecoin, born out of an Internet meme featuring a Shiba Inu dog. Doge has experienced two notable bull runs, the first in 2017 and the most recent in 2021, propelling it to astronomical prices.

In 2017, Dogecoin saw a surge in value alongside the broader cryptocurrency market, driven by speculative trading and social media buzz. However, its true moment in the spotlight came in 2021 when it captured the attention of retail investors and celebrities alike, including Elon Musk, who often tweeted about it.

The dogecoin rally also took place right around the same time as the Wall Street Bets mania that sent stocks like GameStop (NYSE: GME) soaring. Doge actually hit highs of close to $0.75 in 2021 during its meteoric rise.

The meme-inspired nature of Dogecoin, coupled with its strong community support and endorsement by influential figures, fueled its exponential growth. The allure of participating in a meme-driven movement, combined with the potential for quick profits, has been the driving force behind Dogecoin’s rallies, showcasing the significant impact of internet culture on cryptocurrency markets.

Coming off its high of around $0.75 in 2021 Doge slipped all the way down to about $0.06 in the bear market before pumping over 150% in the last few months to reach its current price of about $0.14. Doge is the leader of crypto memecoins and its breakout from range lows shows that this memecoin rally could just be getting started.

However, Doge is not the biggest winner so far from this recent memecoin pump, as other coins are up by much more than 150%. Dozens of memecoins have gone crazy in the last few weeks, but I want to highlight Pepe today, a memecoin that I believe has the potential to be one of the biggest winners from the memecoin sector in this upcoming bull market.

Dogecoin is a meme of a dog, a Shiba Inu to be exact, but Pepe, is a meme of a frog. That was a ridiculous sentence to write, but it gets to the heart of why these memes hit home with so many people. Everybody loves a cute little Shiba Inu, and you’ve likely seen the meme before.

If you’ve been anywhere on the internet in the last few years you’ve also likely seen the Pepe meme as well.

The Pepe meme really found its home on crypto Twitter, and this meme has been shared in crypto communities for years. However only recently has a memecoin been created to support the Pepe meme, and it has already built up a huge following.

The fact that the crypto community already has history with the Pepe meme and has been sharing this meme for years leads me to believe this coin could explode in the coming months as more volume enters the crypto market.

Just take a look at Pepe’s chart and see that it’s already been picking up major steam. After a huge rally in June, Pepe’s price trickled lower for months, but this recent rise in memecoins has sent Pepe to new highs and quickly. Pepe is up over 540% since just the start of February.

Now, you might think that since Pepe’s price has already shot up by so much it doesn’t have any room to grow, but that is a losing mentality in a crypto bull market. When the bull market euphoria hits, you want to be riding the hot hand, and Pepe is one of the hottest rides in the crypto memecoin sector.

When investing in any lower-cap altcoin or memecoin one must remember to only invest what they can afford to lose, and these types of trades and investments should only ever be a small percentage of one’s portfolio.

These are risky investments in an already risky market, so I would never suggest putting a large portion of one’s portfolio into memecoins. However, with the right analysis, the right portfolio allocation, and a little luck, memecoins can be one of the most exciting ways to make money in crypto.

Alex Benfield is the lead analyst of Crypto Investing Digest.

Questions or comments? Drop Alex a line: mailbag@investingdaily.com

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This article previously appeared on Investing Daily.