The following text is summarized from the Twitter Space series #Dialogue with Traders, hosted by FC, founding partner of SevenX Ventures, Twitter @FC_0X0
Guest: Hanchao Ma, Twitter @Michael_Liu93
Hanchao Ma's MEME Journey: 100x Profit in 5 Minutes, Becoming Addicted to MEME
Before getting into Crypto, Hanchao Ma was on a very "traditional" finance path: studying finance in university, then working as a Banker at the sell-side, and later at the buy-side. At the buy-side, he was looking at the enterprise services sector, where many blockchain founders wanted to do BAAS, Blockchain as a Service, which gave him the opportunity to see this new technology.
In 2020-2021, Hanchao Ma officially entered the Crypto industry, managing some secondary positions, mainly in BTC, for some traditional finance bosses. From that time on, he started spending a lot of time every day researching new things and looking for Alpha.
Hanchao Ma firmly believes that the Alpha of this cycle is MEME, so he now spends 60% or even 70% of his time on MEME, also playing together with various CX traditional finance bosses.
The addiction to MEME stems from a 100x profit trade in 5 minutes.
At that time, the market was speculating on Musk's signature, and Hanchao Ma and his friends bought some positions in TROLL and ZUZALU. Then, they thought Vitalik's signature might have speculation potential, so they bought TCATI (Green Tea), a cat-themed MEME, from Vitalik's X account signature, with a market cap of around $20,000.
About 5 minutes after the purchase, this coin suddenly skyrocketed to a market cap of around $1-2 million, instantly turning a few hundred dollar position into $30,000-$40,000.
This was actually Hanchao Ma's first real encounter with MEME, and the 100x profit, though only a fraction of the capital, made him feel that "MEME is really fun."
He then started spending more time studying, understanding, and trading MEME, gradually developing his own trading strategy.
Why are Manipulated Pumps More Fun?
PVP trading is a typical zero-sum game, where everyone is competing to be the first to discover a hot spot or create a hot spot, get in at the bottom, and then dump on everyone else when they think it's the top, making money and leaving.
Manipulated pumps, on the other hand, are a game where retail and whales mutually empower each other. The whales want to push the market cap of a MEME higher, get it listed on Binance, so they need to use their capital to find Callers, accumulate, wash trade, and pump, create hype/news, and drive the momentum.
If a whale is good at these things, it means he is good at storytelling, has a large capital base, and has various Caller and exchange relationships, then this is a win-win situation for both retail and whales.
How to identify a manipulated pump?
Hanchao Ma suggests observing whether the wallets are deliberately Wash trading, i.e. maintaining a price range and rapidly buying and selling the same asset within seconds. The purpose of the whales Wash trading their wallets is:
- To be marked as new wallets by tools like GMGN
- To distribute their positions in preparation for the pump
However, as the tools reveal more information, the whales' manipulation tactics are also constantly changing, which is good news for retail, as the whales need more time to accumulate positions and prepare for the pump, giving retail more time to find the powerful manipulated pumps.
How do Whales Manipulate a MEME on Solana?
Early Stage: Accumulate Positions Internally, Launch on Pump
- Due to the "anti-whale" sentiment in the market after the NEIRO incident, whales will hide themselves in the early stage, making the MEME appear to be a "community-driven" project, while accumulating positions internally.
- The whales' biggest enemy in the internal accumulation process is Bots, as there are now many Bots that check the Pump's internal Volume, and they will immediately follow once they detect new wallets buying (5-10 SOL).
- Once they have accumulated enough positions, usually over 75%, they will launch on the Pump.
Mid-Stage: Deploy Capital in Waves
- First Wave: Ignition. Find some Tier3, Tier2 Callers, and have their market makers cooperate to pump the market cap to $5-20 million, then quickly dump.
- Second Wave: Explosive Pump. Deploy the capital gained from the first wave dump, usually the full amount, do market making, and find Tier1 Callers to shill, to quickly pump and not let anyone get cheaper positions.
Late Stage: List on Exchanges
- Whether they can list on exchanges, especially Binance, is a matter of fate, and the whales are also watching. If they manage to list, the liquidity floodgates open, and the subsequent manipulation is consistent with the secondary market.
- The market making after listing is most often operated by Wintermute.
BAN and AI16Z are very typical "whale-manipulated" MEME: the whales spent a very long time accumulating in the early stage, did a big first wave pump, then dumped, accumulated more positions at the bottom, and then did an explosive second wave pump.
How to Ride the Whale-Manipulated Pumps?
There are two strategies:
First, buy after the first wave ends and before the second wave pump starts.
At this stage, the whales are continuously accumulating at the bottom, so if you can find their accumulation traces (mainly by observing the wallets), you can follow and buy in.
Second, decisively chase when the second wave starts.
At this stage, the whales will most likely find Tier1 Callers to cooperate, deploy the capital they accumulated from the first wave dump, and quickly pump the market cap, seeking a listing. Generally, when the second wave starts, the real powerful whales will rarely let the price retrace even a little, to give retail a chance to get in. So if you observe the second wave starting and it has already exceeded the first wave, you can chase and buy in at higher prices.
Understanding MEME with the Logic of Short Videos
In May, when I talked with Zepump about MEME in the #Dialogue with Traders, he mentioned a point that MEME is to VC coins what short videos are to long videos. Hanchao Ma also strongly agrees with this logic, and explains the "commonalities" between short videos and MEME from the perspectives of "demand hierarchy" and "evolutionary path".
First, on the demand hierarchy.
Why are people, especially the post-00s, willing to tirelessly scroll through short videos and MEME? Because they are satisfying their most basic inner desires:
- Short videos satisfy lust and so-called "laziness". Because young people's time is fragmented and they have little entertainment time, they can only get brief moments of happiness by scrolling through Douyin.
- MEME satisfies greed. Most young people now feel that the threshold to achieve wealth is too high, so they all want to gamble (get rich quickly).
Then on the evolutionary path.
- Short videos started with UGC, user-generated content, but later you'll find no one is watching UGC anymore, everyone is watching PGC, because the production quality of PGC is better.
- In MEME, at first everyone was a very naive retail, but later they found whale-manipulated pumps are more fun, because the whales can pump it high, as they are essentially strong at operations and have abundant capital and various Caller and exchange relationships.
Fundamentally, both short videos and MEME are very much attention economy markets.
Which Coin Will Become the "New King" in the MEME Supercycle?
Hanchao Ma firmly believes that MEME has already been determined to be a long-cycle thing. If we look back two years from now, most of the MEME in the market today will probably have crashed, but the MEME that can persistently stand out will be more, and there will definitely be one that is more powerful than SHIB, and this MEME is most likely already in the market.
Which coin might become this "new king"?
First: $DOGE
The true leader of the MEME track, the "BTC" of MEME, DOGE will most likely get an ETF after Trump starts his presidency.
The second: $PEPE
The strength of PEPE lies in the fact that it is early, and its logic is something that many Chinese people cannot understand. In fact, most of the projects that have emerged on Ethereum are basically derivatives of PEPE, which has already become a consensus. Currently, it is difficult to find a MEME in this cycle that has a consensus as strong as PEPE.
The third: $WIF
The fourth: $POPCAT
$WIF VS $POPCAT, Mack is more optimistic about the latter. In fact, there is a particularly interesting point about WIF and POPCAT: although WIF's market cap is twice that of POPCAT, their pools are the same.
Nowadays, there are fewer people in the foreign community and conspiracy groups talking about WIF, and the attention has shifted to POPCAT, which may also mean the choice of capital.
What Callers should you focus on to play MEME well?
Overseas:
Murad @MustStopMurad, Crash @CrashiusClay69, Mitch @idrawline, OverDose @Overdose_AI, Moneylord @moneyl0rd, Ansem @blknoiz06, Spidercrypto @SpiderCrypto0x
Chinese community:
The first: Wizard @0xcryptowizard
The Wizard is a Builder, and following his lead feels relatively stable, because he continues to build, and the projects he builds are from very good angles.
The second: magnolia @0xmagnolia
Magnolia has written a lot of substantive content, teaching everyone how to find MEME and how to win in this game. And Magnolia's ability to grasp hot spots is very strong, so she can be a good reference for where the hot spots are and where the continuity might be.
The third: Timo @timotimoqi
Timo is Mack's friend in real life, and they used to be investors, so their trading perspectives may be similar. The tweet with 8 questions to ask yourself before buying MEME came from Timo 👉https://x.com/timotimoqi/status/1847147614963486730
Timo may have called five or six projects recently, three of which have gone up over 100x.
Finally, I want to say that Callers have a problem, which is that they may be good a month ago, but a month later they may not be good. For example, POE, the things he posted before were particularly good, and after he blew up more than a month ago, he started calling all kinds of Rug projects to harvest the shrimps.
Although you don't know what happened behind the scenes, the lesson is: when looking at Callers, you have to look at them comprehensively. It's like short videos, he's just the one who recommends the videos to you, not the one who wants you to like them, the right to like them is still in your own hands.
In conclusion
I think the core of playing MEME is to find the stage and trading method that are within your capabilities. In fact, no matter when you enter, you can always find your opportunity in MEME, which is the most interesting part of this cycle.
