What Are Stonks and What Do They Mean in Crypto?

What Are Stonks?

Stonks originally came from internet slang and is an intentionally misspelled version of the English word stocks, meaning shares. The term is often shown with Meme Man, a computer-like character standing in front of a rising chart.

Within crypto, the term has also taken on a more specific meaning. It is used, among other things, for stock meme coins: memecoins that play on stocks, public companies, or the culture around the stock market.

A memecoin is a cryptocurrency based on a meme, internet character, online trend, or joke. With stock meme coins, there is also a link to the stock world. A token can, for example, refer to a well-known public company, stock, or stock index.

One important thing to know is that a stock meme coin is not a stock. If a token refers to a company or stock, that usually does not mean you become an owner of that company. You also do not automatically get voting rights, dividends, or a right to company profits.

Stock meme coins also should not be confused with tokenized stocks. Those are tokens that are meant to provide economic exposure to a real stock.

Key Takeaways

• Stonks is an intentionally misspelled version of stocks and started as an internet meme.
• In crypto, the term is used, among other things, for stock meme coins.
• Stock meme coins are memecoins that play on stocks, public companies, or the stock market.
• A stock meme coin is not a real stock and usually does not give ownership, dividends, or voting rights.
• Tokenized stocks are different: they are meant to provide economic exposure to a stock.

Where Did the Term Stonks Come From?

The term stonks comes from a surreal internet meme and not from crypto. On June 5, 2017, the Facebook page Special Meme Fresh posted an image of Meme Man in front of a stock chart with the caption “STONKS”.

The word is an intentionally misspelled version of stocks, meaning shares. The joke is that Meme Man looks like he is proud of a smart financial decision, while the meme is often used for strange, bad, or overly optimistic financial choices.

In the years that followed, the meme spread further through Reddit and other online communities. Later, stonks was also widely used in trading and meme-stock groups, such as WallStreetBets.

Because of that, the term became strongly linked to stocks, speculation, price increases, and online investing culture. From that culture, the concept eventually also made its way into the crypto world.

How Is Stonks Used in the Crypto World?

In crypto, stonks is used in different ways. People can still use the word as a meme when a cryptocurrency goes up sharply or when a trade seems to work out well.

For example, someone might post only “stonks” after a big price jump. That is not analysis or a prediction, but usually a funny or ironic way to show excitement. Sometimes FOMO also plays a role: the fear of missing out on a possible price increase.

The term is also used in crypto for stock meme coins. These are memecoins that take their name, ticker, image, or theme from stocks, public companies, stock indexes, or the culture around investing.

CoinMarketCap, for example, has a separate Stonks section where stock meme coins are shown alongside tokenized stocks.

Stonks as Stock Meme Coins

A stock meme coin combines memecoin culture with themes from the stock market. A token might, for example, joke about a well-known public company, refer to a specific stock, or use a famous stock index as inspiration.

That does not mean there is a real financial link to that stock. The creator of the stock or public company also does not have to be involved with the memecoin at all.

The practical use of such a token can be limited or even completely absent. In that case, the price is mainly influenced by supply and demand, attention on social media, the community, and speculation.

A listing on a crypto exchange or price website also does not automatically mean that a stock meme coin is officially connected to the stock or company it refers to.

How Is the Value of Stonks Determined?

The value of a stock meme coin is mainly determined by supply and demand in the crypto market. If many people want to buy at the same time, the price can rise sharply. If many people want to sell, the price can drop quickly.

Attention often plays a big role here. Memes, social media posts, influencers, a listing on a new exchange, or an active community can attract more buyers. That attention can also disappear quickly, for example when many holders try to take profits at the same time.

Liquidity is important here. Liquidity shows how easily a token can be bought or sold without causing a big price change. With a token that has low liquidity, a relatively small buy or sell order can already cause a large price move.

Example: Suppose a stock meme coin is based on a popular public company and suddenly gets a lot of attention on social media. Many people want to buy the token, while there are only a few sellers. The price can then rise quickly. If a large holder later sells many tokens while there are few buyers, the price can drop hard.

It is important to know that the price of a stock meme coin does not automatically follow the price of the related stock. A meme token about a public company, for example, can go up while the real stock goes down, or the other way around.

It is also important to distinguish between the price, the market cap, and the fully diluted valuation. Market cap is roughly the price per token multiplied by the number of tokens currently in circulation.

Fully diluted valuation looks at what the total value would be if all tokens that could eventually become available were already in circulation.

These numbers do not say how much money is actually in the market. A high market cap, for example, does not mean that all holders could sell their tokens at the current price at the same time.

What Is the Difference Between Stock Meme Coins and Regular Stocks?

A stock meme coin can refer to a stock or public company, but it usually does not give you ownership in that company.

A regular stock does. If you own a stock, you have an ownership stake in the company. Depending on the type of stock, you may, for example, have voting rights and receive dividends.

With a stock meme coin, you are buying a cryptocurrency. Its price is determined separately on the crypto market and does not have to follow the stock the meme is based on.

There are also tokenized stocks. You should not confuse those with stock meme coins. A tokenized stock is specifically designed to provide economic exposure to a real stock. How that works exactly and what rights are attached to it depends on the issuer and the product.

In short:

• Stock: represents ownership in a company.
• Tokenized stock: a token that can give economic exposure to a stock.
• Stock meme coin: a memecoin that uses a stock, company, or the stock market as its theme.

What Role Do Memes and Communities Play in Stonks?

Memes and communities play a big role in stock meme coins. A recognizable company, stock, or stock-related term can be combined with humor to quickly attract attention within online communities.

An active community can create more visibility and interest. When many people talk about a token and trade it, trading volume can also increase.

On the other hand, a large community does not automatically mean a project is trustworthy. Bots, paid promotions, and organized campaigns can make a token seem more popular than it really is.

When people feel like they need to buy quickly so they do not miss a possible price increase, demand can rise sharply in a short time.

Social media can also be used for a pump-and-dump. In that case, a token is heavily promoted first, after which early buyers or organizers sell their tokens at a higher price.

How Seriously Should You Take Stonks?

Stock meme coins are often highly speculative. Their price can rise or fall sharply in a short time and is often influenced by attention, sentiment, and activity within the community.

The reference to a real stock or well-known public company can make a token recognizable, but by itself it does not create underlying value or an official relationship with that company.

So if a token uses the name, ticker, or image of a well-known public company, that does not mean the company issued, supports, or approved the token.

The token’s value also does not have to move with the stock. A stock meme coin and the related stock are two separate markets.

For users in the European Union, rules apply to certain crypto-assets and crypto service providers. Those rules do not remove the risks of stock meme coins. What protection applies depends, among other things, on the type of token and the provider.

What Should You Watch Out for When Investing in Stonks?

If you are considering a stock meme coin, it is important to look beyond just the name, meme, and price chart.

1. Check the exact contract address
   Find the contract address through the project’s official channels and verify it in a block explorer. Different tokens can use the same or nearly the same name and ticker.

2. Check the relationship with the stock or company mentioned
   Do not assume a well-known company is behind the token. A stock meme coin can use a company name, stock, or logo as inspiration without any official partnership or financial link.

3. Research who is behind it and what you are buying
   Look at who created the project, what information is available, and what rights you have as a token holder. Verify claims about partnerships or use cases with the parties mentioned whenever possible.

4. Look at liquidity, trading volume, and token distribution
   Check how much trading is actually happening and how many tokens are held by large wallets. If a small number of wallets owns a large share of the tokens, big sales can have a major impact on the price.

5. Watch for red flags
   Be careful with guaranteed returns, strong time pressure, and sudden promotion campaigns on social media. An audit, listing, or locked liquidity does not mean a token is risk-free.

6. Protect your crypto wallet
   Never share your seed phrase or private key. Be careful with unknown links, messages, and accounts pretending to be a well-known company, project, or person.

7. Be prepared for big losses
   Small, hype-driven stock meme coins can lose value quickly. It is possible to lose a large part or even all of your position’s value.

Examples of Stock Meme Coins

There are now several cryptocurrencies that fall under the category of stock meme coins.

SPX6900 (SPX) is a well-known example. The name plays on the S&P 500, but SPX6900 is not a stock or stock index and does not give ownership in companies from the S&P 500. It is a memecoin that uses the traditional financial world as part of its meme.

Stonks (STNK) uses the well-known Stonks meme as its theme and is also classified as a stock meme coin.

There are also tokens with names like GmeStop (GME) and MSTR2100 (MSTR), which clearly refer to themes and names from the stock market.

The fact that such tokens refer to well-known stocks, companies, or stock-related terms does not automatically mean there is an official relationship with those parties. Being placed in a category also says nothing about a token’s safety or future performance.

What Risks Do Stonks Bring?

Stock meme coins can involve several risks at the same time:

• Price risk: the price can rise or fall sharply in a short time. An all-time high can quickly be followed by a big drop.
• Liquidity risk: with low liquidity, you may not be able to sell at the visible market price. A large sale can also push the price down itself.
• Confusion with real stocks: a token can refer to a well-known stock or company without any official or financial relationship.
• Manipulation and fraud: groups can promote a token to drive up demand and price, then sell themselves.
• Information risk: posts from influencers, communities, or other accounts can be paid for, incomplete, or misleading.
• Technical risks: smart contracts and other parts of a crypto project can contain bugs or vulnerabilities.
• Wallet risk: phishing, stolen private keys, and other forms of fraud can lead to token losses.
• Limited protection: what legal protection applies depends on the token, the provider, and how you trade it.

A stock meme coin with lots of hype, low liquidity, and a small number of large holders can therefore be especially vulnerable to sharp price swings.

Conclusion

Stonks started as an internet meme about stocks, price increases, and financial decisions. In crypto, the term is now also used in the world of stock meme coins: memecoins that play on stocks, public companies, stock indexes, and the online culture around investing.

A stock meme coin is not the same as a stock. It usually does not make you an owner of a company, and its price does not have to follow the stock the meme is based on.

Stock meme coins are also different from tokenized stocks. With tokenized stocks, there is an economic link to a traditional stock, while with stock meme coins the meme or theme is the main focus.

The value of stock meme coins is mainly influenced by supply and demand, attention, sentiment, liquidity, and activity within the community. Referring to a well-known stock or company does not change that on its own.