Josh Bailey, a 26-year-old day trader in Austin, Texas, was scrolling through a cryptocurrency group chat last month when he encountered an investment opportunity: a digital currency created in honor of a dog named Billy.
The dog was cute, he thought, but more important, its name evoked something every crypto trader covets — billionaire status. “I started hearing people say ‘Billy’ to a billy,” Mr. Bailey said. “Kind of has that ring to it.”
Mr. Bailey bought about $900 of $BILLY on Pump.fun, a leading vendor for memecoins, volatile cryptocurrencies based on the fluctuating popularity of internet memes. When he sold his $BILLY holdings a few days later, he made a profit of more than $100,000.
The recent revival of the crypto market has fueled a surge in memecoins, one of the industry’s frothiest, most scam-ridden segments. In the first six months of the year, nearly 1.7 million new coins entered circulation, compared with 264,000 over the same period in 2023, according to Dune Analytics, a crypto data tracker. Many of the tokens have names like Bread (yes, the meme is a loaf of bread) or Baby Trump (the former president in a diaper). One of the most popular memecoins is based on Pepe the Frog, an alt-right mascot that is sometimes used as a hate symbol.
Much of the activity has been driven by Pump.fun, a website that started in January and offers a quick and easy method for spinning up new memecoins. The site generated about $60 million in transaction fees over the first half of the year, according to an estimate by Subin An, an analyst at the crypto venture firm Hashed. But little is known about its operations or its founders, who conduct business under pseudonyms.
The frenzy reveals a side of the crypto world that industry executives rarely mention these days. Seeking to put a series of damaging financial scandals behind it, the crypto industry now markets itself as a newly mature institution, with a growing foothold in the traditional financial sector and a campaign war chest to influence elections. Crypto lobbyists hobnob with politicians in Washington and have petitioned for looser regulations.