Author(s) :

Eshaan Dangayach.

Volume/Issue :

Abstract :

This paper investigates the extent to which memecoin price movements follow social sentiment trends and how their extreme, hype-driven surges challenge economic theories of value, financial regulation, and cryptocurrency legitimacy. Through a randomized controlled trial simulating exposure to viral memecoin propaganda, the study finds that younger participants significantly underestimated risk and overestimated returns after viewing promotional content, even for a fictional asset with no fundamentals. These behavioral shifts demonstrate how memecoins leverage narrative framing and emotional appeal, particularly among younger investors. The paper then explores how memecoins exist in a regulatory void, using case studies and policy responses to demonstrate the dangers of unregulated attention-based assets. The findings present that memecoins pose systemic risks, not just to individual investors, but to the integrity of financial markets, particularly by eroding public trust in the crypto landscape.