Original author: hitesh.eth
Compiled by Odaily Planet Daily (@OdailyChina)
Translator: CryptoLeo (@LeoAndCrypto)
"A whale made 289 times profit on SPX", "Smart money addresses made 117 times profit on GOAT and 855 times profit on GNON"...
"Murad: Meme coin is a sign of the maturity of the crypto industry", "Zhu Su: Memecoin infrastructure makes all tokenization possible", "Arthur Hayes: Meme coin GOAT may reach a market value of 1 billion US dollars"...
SPX, GOAT, GNON, the recent industry events, in addition to BTC reaching $69,000, are the daily Memecoin myths of getting rich, real on-chain data, plus the spread of industry leaders, Meme has become the hottest track recently. Crypto KOL hitesh.eth published an article summarizing "From exposure to belief in Memecoin, the thinking and social cognition process of traders", the following is the full text, compiled by Odaily Planet Daily:
The formation of the “Memecoin cult” follows a similar process of thought and social development as other cult formations, where Memecoin is driven by financial loss, cognitive attachment, and social acceptance gained through cryptocurrency markets and communities.
Here is a breakdown of the different cognitive stages in the creation of the Memecoin cult:
1. Disillusionment with Utility Coins — Losses and Distrust
My personal journey started with losing money in utility coins or VC-backed projects, and this is where the initial mindset shift occurred:
Cognitive dissonance — People believe in the utility or long-term value of these utility tokens, but after experiencing losses, their minds are in conflict. They believed these assets would deliver returns, but reality does not match their expectations.
Loss of Trust — People are disappointed with the prospects of these utility tokens, and the loss of assets causes people to lose confidence in utility tokens (VC-backed or utility-oriented projects), triggering a psychological need for another narrative to explain why they lost money.
Seeking Redemption – After disappointment, people’s minds begin to change and they gradually become receptive to new things, especially ideas that promise faster or more significant financial gains. This openness lays the foundation for their eventual move to Memecoin.
2. Memecoin’s success: strengthening belief through earnings
Next, people made money by trading Memecoin, and their perceptions took an emotional turn:
Relief and Validation — After losing money on utility coins, profiting from Memecoin feels like validation. People begin to associate Memecoin with success, triggering confirmation bias: they begin to believe that Memecoin is not only profitable, but also a reasonable alternative to utility coins.
Bias Reinforcement - At this stage, the mind begins to form a narrative that Memecoin will take off. Despite the lack of fundamental support, the bias shifts to using it as a new path to financial success, without having to think about the deeper utility of Memecoin, the profits and emotional release are enough to justify it.
3. Social frustration - trying to convince others
After the earnings phase, people began to promote Memecoin’s new narrative, but faced resistance:
Inability to clearly articulate vision - While individuals believe in the potential of Memecoin, they have difficulty effectively communicating their vision to others, likely due to the lack of a logical theory behind Memecoin, which results in their belief being based on emotion rather than logic.
Social Conflict — Resistance from others is frustrating. People seek social validation for their new beliefs, but without external validation from their peers, the belief remains personal and internal, prompting them to double down on their beliefs and continue to promote Memecoin heavily on social media.
Cognitive Barriers – The more rejection an individual experiences from others, the more entrenched their beliefs become. At this stage, the mind begins to look for external reasons as to why others do not understand what they “believe.”
4. Meeting the Memecoin “Master” – Emotional Connection
The turning point came when a charismatic Memecoin theorist emerged with a convincing description of the future of Memecoin:
Emotional Appeal - Memecoin theorists provide the missing intellectual framework that individuals need to support their beliefs. These theories make sense of the chaotic, speculative world of Memecoin as it exists today and explain Memecoin's vision for the future.
Personal connection – After meeting this Memecoin theorist, individuals will find similarities in the narrative they spread, which creates an emotional bond. The theorist’s backstory resonates emotionally because it reflects the thinking and experiences that the individual has encountered – financial loss, disillusionment, and redemption through Memecoin. This emotional connection solidifies trust in the theorist’s views.
Cognitive Closure — A sense of closure is felt psychologically. The theorist’s narrative resolves the internal conflict between past losses and current gains and provides a structured way to explain why Memecoin is the future. The theorist’s framework becomes the framework for a personal belief system.
5. Evangelism on social media - the dopamine rush
As individuals begin to promote the Memecoin theorist’s ideas on social media, their reach begins to grow, creating powerful psychological reinforcement:
Dopamine feedback loop - Every time an individual receives a like, comment, or new follower on social media, the brain receives a dopamine boost, and this reward system reinforces the behavior of spreading the theory, allowing the brain to feel the validity of external recognition.
Memecoin gains reinforced - if the price of Memecoin increases during this period, individuals will gain additional recognition, further solidifying their belief in Memecoin and the ideologues, whose minds begin to associate financial success with the spread of the ideology, creating a powerful feedback loop of financial and social rewards.
Social Identity Shift – As social media influence grows, individuals begin to see themselves as evangelists or promoters of Memecoin, and their sense of identity becomes intertwined with Memecoin’s success and the ideas of the ideologues.
6. The formation of the Memecoin cult – cult leaders and shared belief systems
Finally, when others with similar biases and frustrations find the same Memecoin theorist, the individual’s beliefs become part of a wider faith:
Discovery of cult leaders - Other enthusiasts who lost faith in utility coins and became optimistic about Memecoin eventually found an equally charismatic cult leader, around whom a large following developed, a faith community emerged, and individuals realized they were part of a faith community larger than themselves.
Shared Belief System - The Memecoin Cult forms around a shared belief in the Theorists’ ideas, the profitability of Memecoin, and the emotional and financial success they create, with the Theorists becoming the center of this belief system, providing cognitive and emotional validation for the group’s collective biases.
Echo Chambers and Group Reinforcement - As more people join the movement, the group becomes an echo chamber where members reinforce each other's beliefs about Memecoin. The ideas of the ideologues become almost sacred and are not questioned, individual ideas now operate in a closed system, dissenting opinions are dismissed, and the collective belief in Memecoin becomes stronger.
7. Cult-like behavior – total cognitive engagement
At this stage, individuals have fully committed to the Memecoin movement:
In-group/out-group thinking – Individuals now view Memecoin believers as “in-group” and anyone who doubts Memecoin as “out-group”, and the mind begins to protect the cult’s belief system, exclude skeptics, and double down on the Memecoin narrative.
Cognitive barriers and social identity – Individual identities are now inextricably linked to the Memecoin movement, they derive their self-worth from social media influence and Memecoin performance, and the ideas of charismatic leaders are seen as absolute truth.
Continuous Dopamine Rewards – Individuals continue to receive regular dopamine hits from social media interactions and Memecoin price fluctuations, making it increasingly difficult to disengage from the belief system.
In this process, the individual’s mind shifts from financial disillusionment to an emotional connection with the charismatic leader, followed by cognitive acceptance of his biases, and finally to a full cognitive and social commitment to the Memecoin cult.
This cycle is fueled by emotional, social, and economic reinforcement, making it a powerful feedback loop that is difficult to break.
The Memecoin cult operated as a shared belief system that provided both economic hope and a sense of social belonging, all driven by its core ideologues.
