All About Memecoins
Memecoins are becoming a medium of communication and banter on the internet. Memecoin creation and trading are the new equivalent of making threads or replying via comments on the web. It’s becoming the “new normal” and a new globally adopted medium of money-infused internet chatter.
Rather than replying with text or photos, memecoins are just another way for people to banter on the internet via creating coins and the exchange of cryptocurrency value. People love to talk, debate, joke and argue about absolutely anything on the Internet, and memecoins are a gambling-integrated medium to do just that.
Memecoin traders have no sense of investment time horizon. Their thesis is binary: it either pumps or dumps, like a highly leveraged trading position.
A lot of newcomers in the space will be attracted to the leveraged volatility memecoins offer over large crypto coins, but will make the fatal mistake in misevaluating a memecoin’s life cycle. Memecoins, and altcoins in general, are usually leveraged beta with an expiration date as soon as the coin goes out of trend. Memecoins will usually go to zero, as they are all for-profit endeavors created by a centralized team. They’re usually a zero-sum game.
A lot of people have a building or investment thesis to ride a memecoin to billions in USD market cap. While it is possible, I anticipate there will be smaller returns across a huge amount of coins. The lure of hitting it big with one coin will be the lottery ticket dream that will continue to attract hordes of new traders.
Memecoins will continue to thrive on topics that are on the subject of timely events. Memecoins are a major adoption catalyst to crypto and I believe are an exciting area to explore frontier user-experiences and new use cases.
Memecoins tend to grow virally through friend networks, where one friend tells 10 friends who listen to their investment advice. That’s why I believe there is so much growth potential for how big memecoin trading can become; the scale potential is massive. Anyone can be a creator, anyone can be a growth marketer. Memecoins are a platform.
Memecoin trading volume and returns will likely be totally correlated to the directional momentum of Bitcoin; when the market is euphoric, memes should be skyrocketing with returns and activity as well. When Bitcoin drops, there will be many memecoins that die and traders will cycle to the next coin story.
Also, I personally believe Ethereum L2 UX is far too complicated for newcomers to crypto, so most of the memecoin trading will be on ETH mainnet or Solana in the coming months.
