Manical Memecoin Meta

Why memecoins have taken such a strong mindshare of the 2024 bulla

Out of all the speculative assets in crypto, memecoins are THE most speculative. If I had to draw it out on a chart, it’d look something like this:

This is crazy to me because even the left side of crypto - BTC / ETH / your L1s / alts, is already considered highly speculative relative to traditional investing.

Tell any tradfi you’re buying Bitcoin - they’ll think you’re some Gen-Z Zoomer who knows nothing. Even after the Bitcoin ETF, I’ve had friends going to digital assets conferences hosted by big traditional banks, telling me that the attendees were convinced this would “all get shut down soon”.

Yet, this week we’ve seen the following:

• BOME presale, where you could put in 10k and turn it into 1 million at the top

• This caused presale mania, where someone even sent a few million in SOL into the burner address, causing presales to go insane about losing money (the token then mooned, which of course it did)

• And before that, you had general memecoin mania - with WIF / PEPE / MOG / memes on SOL/memes on Base

Memecoins are traditionally a sign of “top signals” in previous market cycles because they indicate an extremely high-risk appetite - something that tends to come only after price has gone up to a point where people feel “invincible”, and that “there is no more bera market”.

Combined with the FOMO of people who missed the entire move up and seeking profits, this creates a cesspool of coins that instantly gratify you - you either make a lot, lose a lot, and you move on.

So - why are memecoins so prevalent in this cycle, even in the early stages? What does it mean - and more importantly, what is the thesis behind it?

The Memecoin Thesis

Memecoins are in a league of their own. They do something better than every other crypto asset - and that is, they can go up an astronomical amount.

L1s go up 10x? They go up 100x. They are designed to be the most reflexive asset on the planet. That reflexiveness works on the downside too, of course - but we shall not talk about that

From Rewkang’s Tweet

Philosophically, I believe that memecoins work because they don’t promise anything. With any other crypto project, things must be promised for the price to pump. Roadmaps must be made, deals struck, raises done - and memecoins are the antithesis of all that. They simply exist.

That in itself is a double-edged sword - if a memecoin somehow gains traction in this attention casino, it can find itself gaining size with the snowball effect - but this also means that when the inevitable correction happens, and attention dies off - it can make or break a memecoin.

Many memecoins then go to zero after that initial run-up - see JOE / SPX / any memecoin from last cycle. The worst part is, they’re so easy to make - and there’s so many of em, that it’s hard to bet on the winning horse. Memecoin traders often find themselves spraying and praying.

So - with this, I hope I’ve painted a clear picture of the true volatility of memecoins. A class of tokens that are easily reproducible, hard to bet on winners, and when the winner does emerge, may find itself losing steam as quickly as it gained it - the market is fickle, after all.

And now, you’re probably thinking: Kyle, this does not sound like something I should even touch with a 10-foot pole. And you’re probably right - but I want to put this in context of the 2024 Cycle.

Memecoins in 2024

We’ve seen something quite amazing in this cycle - the emergence of memecoins so early on in the cycle as a prevailing narrative. Recall what I said above - memecoins were traditionally a “top signal” and a sign of frothiness in the markets.

This time, we got them in the very beginning, and anyone who took it as a top signal would find themselves sidelined for most of the rally. Why this happened is anyone’s guess - late stage hyper-capitalism / financial nihilism that prompted a more hyper-gamble attitude; who knows?

What matters is what this means. Crypto is by an attention market, and you always want to buy what has the market’s attention. In this cycle, we’re seeing that memecoins stick. Not all of em - but the ones that have staying power look poised to become the DOGE/SHIB of this cycle.