Viewpoint: What is the investment value of meme coins? Why don't people like VC coins?
Note: This article is for sharing opinions only and does not constitute any investment advice.
At the Token2049 conference held in Singapore, meme figure Muard mentioned that cryptocurrencies have entered the meme coin super cycle. This live video has attracted widespread attention and sharing on the internet. In the cryptocurrency market, meme coins have become an investment direction that cannot be ignored. However, whether the value of memes is truly recognized by the public is still controversial, especially among traditional investors, who tend to view it as a gambling-like behavior. This article will explore the investment value of meme coins and the logic behind them based on personal observations and understanding of the meme market.
Understanding the value of meme coins from the perspective of attention
Meme coins are a manifestation of the attention economy, which is essentially the monetization of attention. In today's information-overloaded world, attention has become an extremely scarce resource. Just as people's attention is scattered when scrolling through TikTok or Twitter, memes, through their unique cultural symbols, humorous expressions, and even fanatical quasi-religious nature, have successfully attracted and concentrated public attention. Meme coins are the monetization of this attention, linking public enthusiasm with capital flows and market speculation.
The success of meme coins is not based on technology or practicality. As Muard mentioned in his "Meme Coin Super Cycle" speech, the token itself is the product, not the token created for an existing product. This is the difference between meme coins and other so-called "value coins" or governance tokens. As a product, meme coins are heavily dependent on social media dissemination, especially platforms like Twitter and TikTok. As more and more people start discussing the same meme, this attention can snowball. The accumulated public attention attracts more users, short-term investors, market speculators, and even so-called "whales".
Furthermore, the success of meme coins is closely related to investors' FOMO (fear of missing out). During the spread of meme coins, FOMO is also accumulated while attracting attention. When a meme coin suddenly becomes a hot topic and its price skyrockets, investors often worry about missing out on a huge investment opportunity. A typical example is the BOME token, which was listed on the Binance platform in just three days.
The life cycle of meme coins
The essence of meme coins is based on attention, and attention is highly volatile. This rapid shift in market focus means that the value of meme coins may collapse instantly. Given this uncertainty, different investors adopt different strategies. I will roughly divide the life cycle of meme coins into three stages: the PvP stage, the consolidation stage, and the top exchange listing stage.
In the PvP stage (usually not more than three days after the birth of the meme coin, and sometimes even just a few hours), investors usually participate with small positions, treating it like a lottery, with the goal of quickly entering and exiting the market to capture opportunities. This stage is suitable for "gambler-type" players with strong short-term trading skills, who are proficient in using monitoring tools, highly sensitive to market signals, and often operate around the clock. Essentially, they are taking advantage of the opportunities created by the flow of attention. A simple example is quickly reacting to Elon Musk's tweets or posts by a super influencer, and then using keyword scanning on the blockchain. However, the investment risk in the PvP stage is extremely high, as once the attention shifts or sustainability declines, it easily becomes a "who runs faster" game.
The second stage is the consolidation stage, which lasts longer than the PvP stage. Based on my observations and thoughts on meme coin investments, I believe that an excellent meme, or a meme coin suitable for larger investments, is not just about speed. In this stage, investors have more time to prepare, and the community also has more time to develop. During the consolidation stage, the initial hype and the underlying narrative of the meme coin become the focus of investors' attention. Meme coins with strong narratives and the ability to defend against imitation are more likely to regain market attention in the future. Additionally, obtaining support from second-tier exchanges is an important signal in this stage, as it provides a place for market makers to participate without having to create a new meme coin-like project from scratch.
The third stage is the listing of meme coins on top exchanges such as Binance, Coinbase, and Upbit. This is not the end of the meme coin's life cycle, but the beginning of a new stage, as it enters a more mainstream or near-mainstream position. Once listed on top exchanges, the security of meme coins is significantly improved, and the survival risk is reduced. Their future will mainly depend on the liquidity provided by the bull market.
Meme coins vs. VC coins
Compared to VC coins, meme coins have become a more mainstream investment method at this stage, mainly due to their wealth creation effect. Simply put, other areas and value coins have not generated returns, while meme coins are relatively making money.
Since the beginning of this year, VC coins have been widely criticized, mainly in three aspects. First, the valuation space between the primary and secondary markets has been compressed; second, the airdrop issue; and third, narrative fatigue and the constant repetition of innovation.
First, the high FDV (fully diluted valuation) combined with low liquidity makes it difficult for secondary market investors to move. Now, most projects listed on top exchanges have a market capitalization between $10-20 billion, while the FDV reaches hundreds of billions of dollars. Next, there is the ongoing token unlocking and selling pressure, leaving no room for secondary market investors. A stark contrast is the STEPN project, where the GMT token had a market capitalization of only $100 million when it was listed on Binance's Launchpool, and its 20-fold increase pushed its market capitalization to $2 billion. Nowadays, there are hardly any projects listing with a market capitalization below $100 million, and the enthusiasm for new projects is far less than STEPN back then.
The airdrop issue is particularly thorny. Projects need airdrop hunters to boost valuations, but are unwilling to allocate more tokens to these users, as airdrops are essentially distributing tokens to insiders or those who can benefit insiders. Retail investors are at a disadvantage, whether it's the project team, whales/institutions, or exchanges, they all have the upper hand. As the golden age of airdrops fades, the era where everyone can profit is also gone. Now, studios and Sybil attackers dominate this field, and the relationship between project teams and retail investors/airdrop hunters has deteriorated, with rewards becoming increasingly scarce. In this ineffective situation, it's no wonder people are more inclined to speculate in the meme coin market for quick profits.
The third pain point is narrative fatigue and lack of innovation. Many blockchains are building the same infrastructure, constantly repeating innovations. Although the infrastructure is abundant, applications are scarce. This repetition has led to the fragmentation of liquidity.
Although there are many conspiracy groups and hidden market manipulators in the meme coin market, their relationship with users is not as antagonistic as VC coins. Whether it's retail investors, project teams, or the so-called whales, everyone's common goal is to expand the market capacity. More importantly, users have the opportunity to enter the valuation space of the primary market, which is usually occupied by VC coins, and obtain opportunities on-chain. Although these opportunities are becoming increasingly rare, they still exist, and unlike VC coins, which hardly leave any space for retail investors. Of course, if you are a "gambler-type" player, you can quickly profit and exit in the PvP stage without worrying too much about these broader issues.
Old meme coins vs. new meme coins
From the perspective of attention, the development paths of old meme coins and new meme coins are not very different. Even the largest meme coin, Doge, has experienced periodic price spikes in recent years due to Elon Musk's promotion. Older meme coins that have already been listed on major exchanges no longer rely as much on short-term attention bursts, as their scale is larger and their communities are more mature, allowing them to maintain sustained external attention.
However, the new meme coin has introduced various novel methods. First, the speculative angle has become more diversified, turning into "turning everything into a meme". It is no longer limited to cats and dogs; now we have zoo-themed coins, celebrity coins, political coins, and even the holdings of super internet celebrities like Muard have become the object of speculation. Secondly, with the rise of various pump tools and the low cost of issuing tokens, the birth rate of new meme coins has accelerated. Now anyone can issue meme coins, and many coins share the same name, leading to competition over timing, case variations, and even between different meme coins.
The competition between different blockchains is also intensifying, with Solana and Ethereum being the most prominent, previously Base and TRON, and recently the popular Sui meme coin.
However, fundamentally, this has not deviated from the attention-grabbing framework. The change is the increasing diversity and competition within this framework.
Outlook for the Future of Meme Coins
Vitalik has mentioned that he sells ETH or frequently sells meme coins gifted to him by the community to support charitable causes. This points to a possible future direction for meme coins - playing an important role in supporting charitable causes. Given the strong social nature and viral spread of memes, meme coins may become a tool for funding social initiatives or charitable projects in the future. In this case, the community would not only participate in promotional activities or slogans, but could evolve into a social charity group, participating in offline charitable activities or good deeds.
Of course, the most important aspect of memes and meme coins is to maintain a certain purity - bringing happiness and laughter. If meme coins turn to blockchain development or application building, they may deviate from the original intention of memes. Of course, this is just my personal speculation and opinion.
