Original Author: Baba
Original Compilation: TechFlow
As retail investors start buying our cryptocurrencies again, we need to consider some new factors that were not as important before. Retail investors often do not understand what TVL (Total Value Locked) is, and they rarely use Dune dashboards for analysis, so they do not buy tokens based on the detailed analysis commonly seen on Crypto Twitter. Instead, they are more focused on how to protect their assets and pursue the legendary 1000x returns.
Here are the main factors to consider when understanding the retail mindset and their buying motivations:
Financial nihilism: Many feel that the cost of living is unsustainable, and the opportunities for upward mobility are diminishing, so they are attracted to the potential to improve their economic situation.
High risk, high return mindset: They view cryptocurrencies as a path to get rich quickly.
Word-of-mouth propagation: Stories of turning $100 into $1 million often spark hype and attention.
Lack of knowledge: Retail investors often rely on people they perceive as experts, such as anonymous users on Reddit pretending to be pros and YouTube influencers.
Hundred-dollar warriors: Most are willing to invest $100, even if it may be lost, because it could potentially bring massive wealth.
Accessibility: Apps like Robinhood make it easy for people to start trading through their smartphones or computers.
Given these dynamics, I have been observing indicators of retail interest. YouTube and Reddit are popular platforms for new investors to seek "investment tips." One metric worth tracking is the growth of Subreddit members, as Reddit users tend to be more retail-oriented investors.
After analyzing many Subreddits, the growth of PEPE and BONK members is particularly notable.
PEPE:
BONK:
In comparison, the growth rates of WIF and SHIB are slower:
WIF:
SHIB:
Key findings from the Reddit data:
Importance of Robinhood listing: Listing attracts retail attention and capital inflows.
Unit price bias: Retail investors tend to prefer tokens with lower unit prices.
PEPE's leading position: PEPE has recently gained the most retail attention.
After listing on Robinhood on November 13, the PEPE Subreddit membership has surged, outpacing the growth of all other MEME coins. This suggests that Robinhood remains an important liquidity entry point for retail investors. Although WIF also listed on Robinhood shortly after November 25, its member growth still lags behind PEPE, and even BONK.
The retail preference for low-priced tokens is evident in Subreddit and YouTube comments. Investors often boast about owning "100 million PEPEs" rather than focusing on the actual dollar value of their investment. This mindset stems from a lack of understanding of market capitalization and fully diluted valuation (FDV) - many believe that lower-priced tokens have more upside potential.
The PEPE Subreddit is now the most active among this round of MEME coins, as evidenced by its sustained member growth. This trend is driven by the popular Subreddit narrative of "PEPE reaching $1" - which would be a 46,000x increase. While this goal is clearly unattainable, such stories are similar to those that once fueled the meteoric rises of DOGE and SHIB. Retail investors rely on word-of-mouth, creating a feedback loop: as prices rise, stories of profits spread, attracting more people to join. For example, a retail investor might tell a friend that they have already tripled their money on PEPE, but are still holding because "it's still early." The higher the price, the faster this information spreads.
If these trends continue on Reddit, Subreddit data will become the "alpha" - an effective metric for measuring retail interest in tokens. Currently, PEPE appears to be the clear winner in this group, and the revival of the Ethereum ecosystem will further accelerate this growth.
