No matter what you think, memecoins are winning either way. They've clearly found product-market fit and will continue to impact our near future for a while.
During the first memecoin craze in 2021, it was mostly dog-themed coins that were all the rage — Dogecoin copycats like Shiba Inu, BabyDoge, and Floki.
Back then, memecoins rarely reached the market's upper ranks. Sure, you had your typical silly projects with absurd valuations. But scan the top 250 tokens, and you'd find just a few true memecoins, mostly dog-themed ones riding Musk's Dogecoin obsession.
Today memecoins dominate a significant slice of crypto's upper ranks, making up more than 10% of the top 250 tokens. And they are reaching billion-dollar market caps faster than ever.
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Since 2022, seven tokens have crossed the billion mark: $BONK, $BOME, $WIF, $BRETT, $POPCAT, $CORGIAI, and $PEPE. BOME blasted through in just four days. PEPE needed three weeks. WIF took a bit longer at 84 days. Most others hit the milestone around the five-month mark. The billion-dollar memecoin club remains small. But new members are joining faster than ever.
Memecoin market value now sits at around $59 billion — down hard from the $140 billion peak we saw last cycle. Despite this decline, crypto folks remain hopeful about the potential for growth.
One theory is that memecoins are drawing a lot of attention due to the SEC has sued the market into submission:
If a majority of the crypto market is considered investment contracts (regulated in the same way as securities), then why not trade the most pointless tokens instead?
Crypto trader and memecoin advocate Murad Mahmudov's theory about the "memecoin supercycle" has caught fire in trading circles. The theory suggests multiple factors will merge to fuel a perpetual upward cycle for meme-based digital assets.
It is worth noting, however, that memecoins stand apart from typical crypto trends. No white papers. No fancy tech talk. They thrive on much simpler things: hype, feels, and moonshot hopes. Pure emotion powers the price, and people buy in dreaming of wealth, not utility.
Blockcircle CEO Basel Ismail links the rise of memecoins to the evolution of crypto traders. Traders who've lived through several market cycles have learned hard lessons. They have come to understand that most utility tokens, which promised various technical solutions, in fact, delivered only price speculation. Experience taught them to see through the marketing hype about technical utility.
"Nearly all of the tech in crypto is a smoke screen designed to sell you a token that does nothing," — Murad Mahmudov
Proponents suggest that memecoins might also be fueled by growing distrust of venture capital. Many retail investors were burned when venture capitalists dumped their locked tokens on exchanges. The appeal is simple—memecoins make no grand promises. Unlike traditional tokens, memecoins are viewed as more transparent, with no misleading promises or claims.
The so-called “memecoin supercycle” might seem successful, but there is little doubt it is super unsustainable. The memecoin market runs on hype, driven by impulsive traders chasing quick profits. This approach leads to extreme volatility and abrupt liquidation cascades.
Source: Chainplay
Some observers also point out that Mahmudov has a personal gain in promoting his memecoin narrative. Often, people convince themselves they’ll get rich because someone with a real plan to profit needs them to buy into a narrative.
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This could imply he’s backing his words with money, but it also highlights that he stands to gain a lot from the "memecoin supercycle" narrative gaining traction.
As noted by Jameson Lopp, co-founder of crypto custodian Casa, the success of memecoins reflects the nature of permissionless systems, where people will inevitably do foolish or even scummy things.
So, in the medium term, it seems that we can safely expect more news like this:
"An absurdist AI bot sparked a viral memecoin. Welcome to the future?"
Yes, welcome to this short-lived future, anon.
MetaTalks disclaims responsibility for any investment advice that may be contained in this article. All judgments expressed are solely the personal opinions of the author and the respondents. Any actions related to investing and trading in crypto markets involve the risk of losing funds. Based on the data provided, you make investment decisions in a balanced, responsible manner and at your own risk.