MustStopMorad’s talk at Token2049 has captured a lot of attention recently. If you haven’t watched it I’d recommend taking a look, there’s a summary below as well.  Morad argues that “The Meme Coin Supercycle” is already happening, and there’s no doubt memecoins are dominating performance metrics in 2024. 13 of the top 20 tokens by marketcap are memecoins due to:
Altcoins are overvalued at the time of listing due to VC manipulation. Retail investors are used as exit liquidity. Memecoins, on the other hand, offer retail investors more opportunity to profit. Meme coins are driven by community and culture. They allow retail investors to become part of a movement, unlike altcoins, which are largely controlled by VCs. Altcoins have moved away from community focus, creating overhangs, dilution, and poor price action, leading to retail losses. Memecoins provide fun, a sense of belonging, and cultural engagement. They are a way for "poor" holders to get rich, fostering passionate, unpaid evangelism for the projects. Memecoins should have no supply overhangs, fewer unlocks, and better token distribution. They are evolving into tokenized communities, serving as vessels for faith, belief, and belonging, operating like cults with shared values and narratives. Reflections On The Memecoin SupercycleI think it’s a compelling pitch but one that I’m not totally on board with. While there is potential for cult like communities to grow and pump tokens I think that it is still a player vs player game and the founders/devs still have an advantage and are extracting value (otherwise they wouldn’t be doing it). Traders funds are cycling through different memecoins and there is a finite amount of investment that this can attract. While there are some people out there hodling large cap memecoins and Gamestop shares, which adds long term value, those that are bag holding tend not to get the same capital gains as those who buy early and sell before the attention shifts. Attention in memecoin markets moves exceptionally fast and 99% of projects go to zero within 24 hours. While I haven’t done an analysis I’d expect 50%+ of new tokens launched have little to no liquidity after the first hour. This is fine as long as you are playing the game and getting in and out knowing the risks, accepting them and speculating on the pump. What Morad is suggesting is memecoins attracting more long term investors which can create an uponly supercycle for the sector. For long term investment success a project would need to attract attention sustainably which I haven’t seen happen often. DOGE was a good exception of something that’s been going longer than I’ve been in the industry and is still attractive (based on the Musk factor). There’s potential for more “blue chip” memecoins to appear and it seems inevitable that one day we will see a $1T market cap memecoin or meme stock. Finding that one out of the 600,000 a year that are minted is a challenge but one that would be exceptionally lucrative. The money that memecoins attract is generally small ticket speculators, Morad suggests that this will shift over time to VC’s and funds allocating to memecoins. I’m not sure if this is realistic long term. Right now the most dynamic funds might be allocating a percentage to the memecoin sector to get exposure to “the hot thing in crypto”. But attention shifts fast between narratives as well and I doubt if it will still be the hot thing this time next year. Without the in vouge status it’s hard to see high net worth individuals and funds, who generally look to protect their wealth rather than speculate, allocating significant amounts to memecoins. Their remit is to find the next web3 Amazon or Google, and it’s hard to explain why they underperformed because they aped their clients money into MooDeng.
That all being said if you are reading this then you probably have a good background knowledge of the space, if you have the time and risk tolerance to be involved then there is doubtless opportunities in trend following and getting in early to the latest and greatest memecoins. I’ve been very lucky to take on a developer in residence role at Stellar for the next 3 months. As part of this I’ll be providing developer support at the Meridian Hackathon and Conference. If you are in London between the 12th and 17th October why not join us: Hackathon: https://bit.ly/stellarhackathon Meridian Conference: https://bit.ly/stellarmeridian
Bitcoin is still ranging between $57k and $69k any break out above or break down below and things will start to move quite quickly. ETH/BTC is trying to form a support at 0.04, perhaps a slight change in market structure as we’ve made a higher high there as well. Potentially ranging from 0.4 to 0.5 as well. Social links are below and if you enjoyed this newsletter I would appreciate it if you could share this content
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