1. Overview of MEME culture
MEME Definition and History
MEME, a term first proposed by biologist Richard Dawkins in his 1976 book The Selfish Gene, is used to describe a way of spreading cultural information, similar to the spread of genes in biology. Dawkins defines MEME as a unit of cultural communication that is transmitted among humans through imitation. With the development of the Internet and social media, the concept of MEME has evolved to refer to pictures, videos, texts or ideas that spread rapidly on the Internet. These contents are usually humorous and sarcastic and can be quickly accepted and spread by the public.
In the early days of the Internet, MEMEs mainly appeared in the form of simple pictures or texts, such as emoticons, Internet memes, etc. With the advancement of technology and the popularity of social media, the form and content of MEMEs have become more diverse, including complex video clips, imitation challenges, etc. MEME culture has spread rapidly around the world due to its unique sense of humor and instant response to real events, and has become an important part of modern Internet culture.
The role of social media in the spread of MEME culture
The rise of social media has provided fertile ground for the spread of MEME culture. Platforms such as Facebook, Twitter, Instagram, and Reddit not only allow users to create and share MEMEs, but also enable these contents to be widely disseminated in a very short period of time. Social media algorithms tend to prioritize content that triggers strong reactions and interactions, further accelerating the spread of MEMEs. In addition, the characteristics and user groups of specific social media platforms also shape the style and themes of MEME to a certain extent.
The r/wallstreetbets sub-forum on Reddit is a typical example. It is not only a hub for stock trading discussions, but also a source of financial MEME culture. These communities discuss stock market dynamics and investment strategies in a humorous and sarcastic way, forming a unique community culture and influence.
The intersection of MEME culture and financial markets
As MEME culture becomes more popular, its influence begins to spread beyond traditional fields, one of which is the financial market. Through social media platforms, retail investors use MEME to express their views, emotions, and predictions on the stock market, and this phenomenon gradually forms a new market force. MEME can spread among investors at an extremely fast speed, affecting their emotions and decisions, and thus affecting the direction of specific stocks or the entire market.
This phenomenon was particularly evident in the GameStop incident, when a group of retail investors organized through social media to fight against the short positions of large hedge funds, causing abnormal fluctuations in stock prices, which subsequently led to the SEC's involvement in regulation. This not only demonstrated the influence of MEME culture in the financial market, but also triggered extensive discussions on market fairness, information dissemination mechanisms, and regulatory policies.
MEME Culture and the Rise of Cryptocurrency
MEME Cultural Evolution
MEME culture, which originated from simple jokes and picture sharing in the early days of the Internet, has evolved into a global social phenomenon that affects politics, entertainment and even financial markets. MEME, a term first proposed by Richard Dawkins in his 1976 book "The Selfish Gene", is used to describe a unit of cultural communication that can spread in human culture through imitation. With the development of the Internet and social media, MEME has become more diverse and complex, no longer just pictures and text, but also includes videos, GIFs and various interactive forms.
In the financial field, MEME culture has become a new market influence through the promotion of social media platforms. This influence is especially significant in the cryptocurrency market. A typical example is the emergence and explosive growth of cryptocurrencies based on DOGE, SHIB, PEOPLE, PEPE, and BOME.
Characteristics of the cryptocurrency market
The cryptocurrency market has experienced rapid development and expansion since the advent of Bitcoin in 2009. Compared with traditional financial markets, the cryptocurrency market has several unique characteristics: high volatility, decentralization, global accessibility, and relative anonymity. These characteristics have attracted a large number of investors and traders, especially those who are interested in technology and seek high returns.
These characteristics of cryptocurrencies also make them ideal vehicles for the spread of MEME culture. Cryptocurrency communities tend to use social media platforms for communication and information sharing, which promotes the popularity and spread of MEME in these communities.
The connection between MEME culture and the development of the cryptocurrency market
The connection between MEME culture and the cryptocurrency market dates back to early Bitcoin forums and chat groups, where users often shared jokes and pictures to express their opinions on market fluctuations. Over time, this culture evolved into a broader phenomenon, especially with the creation of MEME coins like Dogecoin, which took a more prominent place in the cryptocurrency market.
The success of Dogecoin shows how social media and MEME culture can propel a project from a simple joke to a multi-billion dollar cryptocurrency. This not only attracted more people to participate in the cryptocurrency market, but also showed how social media sentiment can affect the price and market dynamics of cryptocurrencies.
2. Case studies: GameStop, DOGE
The first MEME in the investment field is DOGE, the originator of MEME. On December 6, 2013, Dogecoin was co-created by Billy Markus and Jackson Palmer as a cryptocurrency based on the popular Internet meme "Doge" to mock "BTC". In 2014, Dogecoin quickly gained attention on social media such as Reddit and was used as a currency for rewards and tips. As the originator of MEME, DOGE's price did not increase much until 2021. It was not until the GameStop retail short squeeze incident that it achieved a miracle of 100 times in 3 months under the spread of Musk's social media influence.
Let’s first talk about the GameStop retail investors squeezing out institutions. I believe this is a major event that opened up the MEME coin sector of the cryptocurrency. It was precisely because of the "rebellious" cultural attributes brought about by the battle between retail investors and institutions that there was a subsequent surge in DOGE, which opened the way for alternative MEMEs such as SHIB, PEOPLE, and BOME.
GameStop retail investors fight against institutions, Robinhood directly shuts down retail accounts, triggering SEC regulation
Wild swings in GME stock price
GameStop, a physical video game retailer, experienced wild stock price fluctuations in late 2020 and early 2021. The event originated in the r/wallstreetbets (WSB) sub-forum on Reddit, a mecca for retail investors who began buying GameStop shares and options, partly out of a belief that the company's stock price was undervalued and partly to fight against institutional investors, especially large hedge funds, who bet that GameStop's stock price would fall.
As more and more WSB users got in on the action, GameStop's stock price began to rise dramatically. In just a few weeks, GameStop's stock price soared from about $17 to a high of $483, resulting in significant losses for many hedge funds, especially those with large short positions.
The r/wallstreetbets community on Reddit and its impact
The r/wallstreetbets community is known for its eclectic discussion style and penchant for high-risk investment strategies. Members of the community use memes, slang and a sense of humor to share investment ideas and market analysis, forming a unique subculture. The GameStop incident was the result of collective actions by members of this community, demonstrating the potential for groups of retail investors on social media platforms to have a significant impact on financial markets through their collective efforts.
This incident also highlights the role of social media in modern financial markets: as a platform for information dissemination and collective action, social media can quickly gather a large number of individual investors and form a strong influence on the market. It also provided inspiration for Musk and promoted Musk to become the future MEME leader. He is also the best candidate, with huge social media influence and the ability to spread and cover a large number of people in a short period of time.
The Economic Consequences of a Short Squeeze
The phenomenon in which GameStop's share price surge caused hedge funds to suffer huge losses is widely known as the "short squeeze." In order to close their positions, short sellers had to buy shares at a cost higher than the purchase price, further pushing up the share price. This situation not only caused direct financial losses to hedge funds, but also triggered an increase in market volatility, affecting the stability of the entire stock market.
The GameStop incident has triggered extensive discussions on market manipulation, retail investor protection, and the response strategies of financial regulators. Many people question whether the existing financial regulatory framework can adapt to the new reality of financial markets in the social media era, and how to maintain market order and fairness while protecting investors.
This incident attracted the attention of the SEC, which subsequently took a series of measures to enhance market supervision and protect investors. The SEC closely monitored market fluctuations, evaluated the reasons behind extreme price fluctuations, and pledged to maintain market fairness and order; it reviewed the behavior of trading platforms, especially those that may affect investors' trading ability, and proposed requirements for strengthening information disclosure to improve transparency and prevent market manipulation. In order to improve trading mechanisms, the SEC considered optimizing the short-selling mechanism and proposed implementation rules for reforming trading mechanisms such as short-selling. The SEC also issued new regulations requiring institutions to disclose short-selling information to improve the transparency and efficiency of market information. At the same time, SEC Chairman Gary Gensler raised concerns about the issue of "gamification" of trading and considered launching the Regulation Best Interest (RegBI) to enhance the responsibilities of brokers. These measures are aimed at maintaining the stability of financial markets, protecting investors from improper behavior, and promoting healthy market development.
Musk’s dog – DOGE
Dogecoin's origins and explosive growth: Dogecoin was originally created as a light alternative to Bitcoin, but then experienced explosive growth due to its unique brand image (a Shiba Inu named Doge) and strong community support. Especially driven by Musk, Dogecoin has become a major market phenomenon, demonstrating how MEME culture affects the value and popularity of cryptocurrencies.
The initial MEME atmosphere in the Reddit community and the phenomenon of retail investors joining the group caused by the GME incident. Retail investors urgently need to spread the MEME culture in cryptocurrency. Elon Musk, CEO of Tesla and SpaceX, frequently posts relevant comments on Twitter. Dogecoin’s tweet, his support for Dogecoin has undoubtedly increased the interest and confidence of ordinary retail investors in this cryptocurrency.
Of course, during that period in 2021, global capital rose sharply, the Federal Reserve released unprecedented water, the cryptocurrency market rose as a whole, many cryptocurrencies experienced significant price growth, BTC was also hitting record highs, and a lot of funds flowed out of BTC and entered the depths Smaller coins, this market atmosphere has increased investors’ pursuit of potentially high-return cryptocurrencies. Among them, Dogecoin has successfully emerged from the circle due to its unique cultural attributes and fun, becoming the first choice of retail investors. At that time, many cryptocurrencies The first choice of outsiders is to buy cheaper Doge instead of Bitcoin. The price has skyrocketed, and more and more retail investors are FOMO. More retail investors are worried about missing out on the opportunity to get rich. This group psychological effect has further pushed up the price of Dogecoin. price, more imitations will appear in the future, such as shib and other animal coins, but the life cycle of MEME coins is getting shorter and shorter. DOGE has reached its peak after three months, and subsequent imitations have increased from one or two months to more than ten years. For a few days, it may even return to zero right after the market opens.
DOEG's younger brother——SHIB
Shiba Inu: The rise of another MEME coin: Inspired by the success of Dogecoin, the Shiba Inu token was created as a "Dogecoin killer". It attracts attention and investment by creating a MEME culture around its token and ecosystem, but as a copycat, no matter how well it has been operating, its big brother DOGE is its upper limit. The life cycle and the increase of SHIB are far less than DOGE. If a MEME coin wants to have its own future, it must be a new story, a new concept, and a gameplay that cannot be repeated in the current market.
The originator of refund gameplay——PEOPLE
The PEOPLE token, also known as the ConstitutionDAO token, was born out of a unique community project that aimed to purchase a copy of the U.S. Constitution through cryptocurrency crowdfunding. ConstitutionDAO is a decentralized autonomous organization (DAO) that leverages blockchain technology to bring community power together to participate in traditional auction markets. Although the effort ultimately failed to purchase a copy of the Constitution, the project generated widespread attention and left a lasting impression in the cryptocurrency community.
How to play PEOPLE tokens
Community participation and governance: PEOPLE token holders can participate in the governance of ConstitutionDAO and vote on the future direction and decisions of the DAO. This includes the right to decide on key issues such as the use of funds and project development strategies.
Crowdfunding and Funding Returns: While the original crowdfunding effort was intended to bid on a copy of the U.S. Constitution, this failed attempt actually increased awareness of the PEOPLE token and the entire project. Participants can hold PEOPLE tokens as a way to support the project and potentially participate in future crowdfunding for other similar projects.
Cultural and community value: The PEOPLE token and the ConstitutionDAO project demonstrate how cryptocurrency and blockchain technology can be used in collective actions and community-driven projects. The token itself carries the participants’ value recognition of democracy, freedom, and innovation.
The difference between PEOPLE and other MEME coins
Goal and Origin: Unlike most MEME coins, which are primarily intended for entertainment or pure speculation, the PEOPLE token has a specific goal behind it - to bid for a copy of the U.S. Constitution. This unique origin story and clear purpose makes the PEOPLE token unique.
Community and cultural value: The value of PEOPLE tokens largely reflects the unity of its community and the pursuit of specific values. This is not just a financial investment, but also support for certain cultural concepts and community practices.
DAO structure: ConstitutionDAO, as a decentralized autonomous organization, represents the application of blockchain technology in promoting transparent and democratic collective decision-making. People who hold PEOPLE tokens become part of the DAO and participate in the governance of the project. This model is not common in MEME coins. In particular, its initiator refunded 40 million US dollars after the auction failed, which greatly spread the influence of its DAO community. In contrast to the recent black pools, non-refunds, and direct absconding of various local dog initiators, the PEOPLE pattern seems extremely great.
NFT MEME Coin——Pepe the Frog (PEPE)
Pepe the Frog originated from a cartoon drawn by Matt Furie. It became popular on Myspace, Gaia Online and 4chan in 2008. It became one of the most popular Internet memes on Tumblr in 2015. In May 2023, these blockchain-based digital cards showed different images of Pepe the Frog and have a certain popularity among collectors and meme enthusiasts.
How to play Rare Pepe cards
Digital collection and trading: Rare Pepe cards are digital assets based on blockchain technology and can be bought, sold and traded. The cards are stored on the blockchain as digital collectibles, guaranteeing their scarcity and uniqueness.
Counterparty Platform: Rare Pepe cards primarily use the Counterparty platform, a platform built on the Bitcoin blockchain that allows users to create and trade a variety of digital assets.
Community Engagement: The creation and circulation of Rare Pepe cards has fostered the formation of a community around the Pepe the Frog meme. Community members not only trade cards, but also share creative inspiration and participate in the design of new cards.
The difference between PEPE and other MEME coins: NFT MEME’s new story.
Artistic and cultural value: Unlike many MEME coins that focus primarily on market speculation, Rare Pepe cards emphasize the value of artistic creation and cultural expression. Each card is a unique work of art with a specific cultural and community meaning behind it.
Card-based trading mechanism: Unlike other MEME coins that are traded directly on cryptocurrency exchanges, Rare Pepe card trading is more similar to traditional collectible trading and requires specific platform and wallet support.
Interactivity and creativity: The Rare Pepe project encourages community members to participate in the creation and storytelling of cards, making the entire project not just about buying and selling, but also about creation and sharing.
All rush into the pool, real performance art——BOME
Project Origin and Concept
BOME is a MEME currency issued by artist Darkfarm. Its origin can be traced back to March 2021, but the NFT he issued in ETH did not attract attention at that time.
Community and pre-sale strategy
Based on trust, it is a pre-sale method that is very consistent with the spirit of web3, and the project sponsors have a great pattern. All the SOL raised is used to flush the pool.
Communication and influence
All rushing into the pool, "real performance art", the actions of the BOME project initiator triggered the Twitter dissemination chain.
Combination of art and market
The core of the BOME project is not only financial gains, but also an art performance. Darkfarm presented an art performance show through BOME, deconstructing a more outrageous world and blowing a bigger bubble. This strategy of combining art with the market not only provides investors with a new way to participate, but also brings new cultural elements to the cryptocurrency market. The contract name deployed by bome is the same - Fuck ME. He is starting a more ambitious art performance show, deconstructing a more outrageous world, blowing a bigger bubble, making a bigger joke, and attracting more people to join the MEME carnival. The behavior of all rushing into the pool, Darkfarm deserves the title of "artist". He is more pattern-oriented than the recent token project parties that have run away and soft RUGs, so BOME deserves to succeed.
The story of BOME has just begun.
By reviewing the well-known MEME coins, we found that they all have some common features: 1. They must have a unique story; 2. The pattern of the project party determines the life cycle of the MEME coin; 3. The life cycle of copycats is very short, ranging from a few months to a few days. Copycats can be played, but they cannot be patterned; 4. Except for DOGE, the well-known MEME coins in the secondary market of the exchange have a maximum return of about ten times from the lowest bottom.
3. The impact of MEME culture on the crypto market
Changes in market participation
The combination of MEME culture and social media has significantly lowered the barriers to entry into the stock and cryptocurrency markets. Through easily shared MEMEs and interactive discussions, retail investors gain unprecedented access to information and communication. This not only promotes the popularization of investment knowledge, but also stimulates more people's interest in stock investment. For example, during the GameStop incident, many individuals who had not originally participated in stock investment were attracted into the market, and they communicated and made decisions through social media platforms such as Reddit and Twitter.
This increased market participation brings positive aspects such as increased liquidity and increased market vitality. However, it also comes with potential risks, including market overheating and excessive investor speculation, which may lead to increased market volatility.
Impact of increased price volatility
MEME culture, spread widely through social media, can quickly mobilize large amounts of money to influence specific stocks, a phenomenon that increases market uncertainty and stock price volatility. Investment decisions that are not based on the company's fundamentals cause the stock price to deviate from the true value of the company, causing market bubbles and instability.
One of the characteristics of MEME culture is rapid changes and short-term popularity, which directly affects the price fluctuations of MEME-centered cryptocurrencies. The spread of a tweet or meme image on social media can quickly change investor sentiment, causing wild price swings.
Although MEME culture can bring attention and capital to some cryptocurrencies in the short term, in the long run, this kind of investment based on popularity rather than fundamentals may pose a challenge to market stability. When the enthusiasm fades, these investments may withdraw quickly, causing a shock to the market.
Challenges to traditional market analysis methods
Traditional stock market analysis focuses on fundamental and technical analysis of companies, but market phenomena induced by MEME culture challenge the effectiveness of these traditional methods. Under the influence of MEME, price movements tend to be driven more by social media sentiment and group behavior than by market fundamentals.
This requires analysts and investors to consider new variables such as social media trends, quantitative analysis of public sentiment, and factors such as online influence. While this brings new tools and perspectives to market analysis, it also raises questions about how to integrate these non-traditional data sources and assess their reliability and impact.
The impact of MEME culture on the crypto market shows that social media has become an important force influencing market dynamics. It has changed the behavior of market participants, increased market uncertainty and volatility, and also challenged traditional market analysis methods. This phenomenon prompts investors and regulators to adapt to the new market environment and develop new tools and strategies to understand and respond to market dynamics in the social media era.
Impact on market participation
The widespread spread of MEME culture through social media has attracted a group of non-traditional investors to the cryptocurrency market. These new participants are often attracted by MEME coins’ entertainment value, sense of community participation, or potentially high returns. This increase in diversity brings new energy to the market, but it also introduces more uncertainty and volatility.
As more and more people pay attention to and invest in cryptocurrencies because of the MEME culture, market activity has increased significantly. This increased activity can promote liquidity, but it can also increase price volatility.
The role of investor psychology and market sentiment
Under the influence of MEME culture, the cryptocurrency market tends to become more emotional. Investment decisions are largely influenced by group sentiment rather than based on in-depth analysis of project fundamentals.
The light-hearted and humorous exterior of MEME culture may dilute the perception of investment risk. Especially for those investors who are new to the market, they may not be fully aware of the potential risks of investing in cryptocurrencies, resulting in overinvestment or losses in adverse market conditions.
4. The role of social media platforms
The role of different social media platforms in MEME culture
Social media platforms have become the main channel for the spread of MEME culture, and different platforms play their own unique roles. For example, Reddit's r/wallstreetbets sub-forum has become a hot spot for retail investors to gather and discuss, while Twitter has become a platform for the rapid spread of financial MEME and market views. Although Instagram and TikTok are not as obvious as the former two in the dissemination of financial information, their popularity among young investors makes them important platforms for the dissemination of financial knowledge and investment culture.
Each social media platform’s user interface, content recommendation algorithms, and user base characteristics all influence the spread and acceptance of MEMEs. For example, Reddit supports in-depth discussions and community building, promoting in-depth communication among investors; while Twitter's short message format facilitates the rapid dissemination of triggering content and triggers immediate reactions.
Social media algorithm and information diffusion mechanism
The algorithms of social media platforms are designed to increase user engagement and dwell time, prioritizing content that inspires interaction and emotional responses. This means that MEMEs that are eye-catching and evoke strong emotional responses are more likely to be promoted and thus spread quickly. This mechanism strengthens the influence of MEME culture in the financial field because it promotes the spread of ideas that can trigger resonance or vigorous discussion.
In addition, the information diffusion mechanism of social media may also lead to the echo chamber effect of information, that is, users are more exposed to information that is consistent with their own views, which may intensify the extremes of market sentiment and affect the quality of investors' decision-making.
The impact of social media on investment decisions
Social media has become an important channel for many investors to obtain information and make investment decisions. Especially for retail investors, social media provides a convenient way to obtain investment advice, market analysis and breaking news. However, the quality of information on social media varies, and unverified information and speculative advice may mislead investors, especially those who lack experience and critical thinking ability.
Social media has not only changed the speed and scope of information dissemination, but also affected investors' behavior and decision-making process. Investors are increasingly relying on discussions and advice from opinion leaders on social media to make investment decisions, which may have accelerated market volatility and reaction speed.
The influence of different social media platforms
Platform differences: Platforms such as Twitter, Reddit, Telegram, and Discord play different roles in the cryptocurrency community. Twitter is the main place for quickly spreading information and capturing market trends; while Reddit and Discord are more used for in-depth discussions and community building.
Information dissemination mechanism and market response in social media
Speed and breadth of information dissemination: Social media enables information to spread at an unprecedented speed and breadth. What this means for the cryptocurrency market is that the spread of news, rumors or analysis can trigger a significant market reaction in a very short period of time.
The complexity of market reactions: The spread of information on social media not only affects the price of individual cryptocurrencies, but can also trigger industry-wide trends and fluctuations. Investor sentiment, expectations and behavior are profoundly affected by social media discussions, making market predictions and analysis more complex and volatile.
5. MEME coin "runaway" problem
Among MEME coins, most of the MEME coins have "run away". The recent SOL series has several well-known "run away" incidents: VT 30,000 BNB, Maji cutting 40 million U, but for retail investors, they are facing In this situation, there is really no solution to get back your investment losses. In short, high returns must be accompanied by high risks. MEME is still in the primary market. Any KOL you see spreading, then she herself must be If you buy in advance, every communicator is a rat store. When you see the MEME coin you want to enter, please be sure to confirm whether you are at the head of this information chain?
6. Why is MEME the first to start this round?
After the adoption of ETF, it is the biggest benefit for cryptocurrencies, and the spread of BTC and cryptocurrencies has also reached a new peak. Institutions are queuing up to enter the market, and massive funds are entering. However, the institutional customers of ETFs are all traditional investors. They have some understanding of cryptocurrency, but they cannot get rid of their own investment attributes. Furthermore, the threshold for cryptocurrency is too high. And the investment philosophy is completely different from the fundamentals and company background of U.S. stocks. Such a huge gap is the cost of learning. It takes time to learn and understand the positioning, fundamentals, etc. of each web3 company.
What this time cost brings is that a large amount of "outside funds" cannot flow smoothly from Bitcoin to other currencies. In order to save time, most people will choose existing institutions to directly purchase ETFs.
A small number of people have entered the cryptocurrency circle, and the first thing they encounter is the myth of high returns and wealth creation - the MEME sector, which has high volatility, which means that they have the potential to achieve high returns in a short period of time. Retail investors who can enter the circle may be attracted by this opportunity to get rich quickly. Compared with Bitcoin, many MEME coins have a lower unit price, which allows retail investors to buy a large number of tokens with a relatively small investment amount. For retail investors with limited budgets, this low threshold investment is more attractive.
Then the launch of the MEME sector will be faster than the previous round. In the last round, BTC went out of the circle entirely because of its own high returns, allowing more outsiders to have a certain understanding of cryptocurrency, but it cannot be said that ordinary retail investors came into contact with cryptocurrency, and they all chose the MEME sector. It was just that the BTC market was at its end at that time, which caused the life cycle of the MEME sector to be very short. This round of BTC going out of the circle was recognized by the SEC. ETF brought institutional funds, bought BTC and withdrawn it, and brought more "outsiders" who had no time to understand the cryptocurrency circle and did not have enough time cost to learn. Then the MEME sector is the only choice at the moment, and this situation will continue for a long time until the next non-MEME sector can "create wealth" and let outsiders realize that other sectors can also obtain high returns by looking at fundamentals and projects, thereby accelerating the learning of "outsiders", but this is not easy. In the short term, MEME is still the leading sector in the encryption circle and follows the trend~.