The last bull market gave birth to two super memes with a market value of 50 billion: doge and shib.
First, let’s make a rough judgment on the meme trend of this bull market:
1. The meme of this round of bull market will be very strong, even stronger than the last round. The reason is: web3 currently has no value. Whether it is AI, depin or chain games, at least until 2024, they are all looking for an excuse to speculate on coins. So why not speculate on air coins directly? Why find so many excuses? In the last round of bull market, many people did not figure out why shib was so strong. In this round, many people should have figured it out. I think Musk has figured it out a long time ago, so he has been questioning web3 and NFT on Twitter, but he has been shouting single dog.
2. The meme history is short and has only experienced one bull market. At the peak of the last bull market, doge was 75 billion, shib was 40 billion, and the total market value of meme coins was close to 150 billion. This round, I calculated 300-500 billion. At the peak of this bull market, the total market value of the currency circle is expected to be 5-10 trillion. In contrast, meme coins only account for 5% of the total market value, which is reasonable.
Then in this bull market, there may be 2 meme coins with a market value of over 100 billion, and N meme coins with a market value of over 1 billion.
3. However: Whether shib and doge can reach the peak of meme again and return to the previous high is unknown because there is no precedent to follow. But are shib and doge still memes at present? They already have development teams, L2 and messy projects and empowerment. They are no longer air. I have no experience, at least I am not optimistic about them at present. If you are optimistic about shib and doge, I must tell you: they are now behemoths with a market value of hundreds of billions. Even if they double to 500 billion, it is only 5 times. If you only want 5 times the return, why do you buy memes?
4. The last round of doge was before the bull market, similar to the current round of PEPE. The last round of shib was released in the middle of the bull market, and may not appear in this round. In the last round, if you hold doge firmly, you will get a hundred times the return, and if you hold shib firmly, you will get a thousand times to ten thousand times the return. But there are so many meme options, how can you choose the final winner? Of course, many people will come out and swear that XXX is the current round of shib. 1% of them will eventually get it right, and the remaining 99% will be wrong. I don’t pursue being in the 1%, as long as I am in the top 10%, I can get a huge return.
1️⃣ The underlying logic of Tugou
This round of bull market should give birth to at least 2 memes with a market value of more than 100 billion yuan. This is the premise for our explosive profits. We only need to catch a meme with a market value of 100 billion yuan.
If the meme coin does not reach a market value of 100 billion in the end, then we naturally will not make that much money. Of course, it may just increase the profit from a few hundred times to dozens of times, and the result should not be too bad.
So if there is a meme with a market value of 100 billion, which one is it? We can’t guess.
So our methodology is: to traverse all meme coins without leaving any behind.
2️⃣Tugou income target
Let's calculate based on an average person's expectations, assuming you want to make 10 million.
For the convenience of calculation, this article will simply and roughly convert it into 1 million US dollars.
So our goal becomes: by traversing all memes, investing in a meme coin with a market value of 100 billion, and making 1 million US dollars.
Of course, you can adjust your goals at will. It is no problem to make 100 million yuan using this method, but the capital requirement will naturally be higher.
3️⃣The method of opening a position is very simple:
Assume that meme coin A has a market value of 1 billion now. If it is a 100 billion meme in the future, it can multiply 100 times. Then as long as you invest 10,000 U in meme A, it can become 1 million US dollars next year.
Similarly, if meme coin B is currently worth 100 million, and if it is a 100 billion meme in the future, then it can multiply 1,000 times. As long as you invest 1,000 U in meme B, it can become 1 million US dollars next year.
Assuming that the market value of meme coin C is 10 million now, it needs to increase 10,000 times to become 100 billion, so you can invest 100 U.
Assuming that the market value of meme coin D is 1 million, it needs to increase 100,000 times to become 100 billion, so you can invest 10 U.
Let's make a table:
This method can be summarized in one sentence: the larger the market value, the greater the investment, and the smaller the market value, the smaller the investment.
My strategy is:
Vote for a set of meme asset packages, including all possible meme targets.
Although a diversified portfolio will significantly reduce the final return, and you probably won’t be able to get a 1,000-fold increase, I think 100 times is possible. If you invest heavily in a meme coin and miss the bet, you will miss the entire bull market.
Of course, positions will be adjusted dynamically during the bull market.
Selection criteria:
Potentially at least 100 times increase
100% full circulation
The early chip distribution is reasonable and fair, with no big investors and no project parties.
No effect, pure meme
One of the core issues is how do we judge whether a meme has the potential to increase 100 times? This is a trap question because you can’t tell. The outbreak of memes is extremely random.
We can only do probability:
1. First, open dextools, where you will see the latest Dogecoin contract listing notification. According to my statistics, considering only the Ethereum (ETH) chain, an average of 15 new Dogecoins are listed every hour (not discussing the situation of Binance Smart Chain BSC here). This data is not exaggerated at all, and the survival probability of these Dogecoins is extremely low.
2. About 70% of the Dogcoins will die on the same day, and the project owners will run away directly, which is commonly known as "rug pull"; the other 29% of the Dogcoins will not survive for more than 3 days. It can be said that this is a market full of scammers and various unreliable people.
3. Generally speaking, on average, each project party will put 1 Ethereum (ETH) into the pool as initial liquidity when creating a new Dogecoin contract, which means that the initial market value of most Dogecoins is about 1 ETH. If you have never been exposed to Dogecoin, it may be a little difficult to understand. To put it simply, if you buy 0.01 ETH of Dogecoin at this time, it is equivalent to obtaining 1% of the share of this Dogecoin.
4. Next, let's talk about our "fool strategy". When each Dogecoin contract is created, we buy 0.01 eth and occupy 1% of its shares. The operation is that simple. Of course, for the sake of ease of understanding, I have simplified the model and omitted transaction fees, gas fees and other links.
5. When should we sell it? In our strategy, the ultimate goal of a Dogecoin is to be listed on Binance Exchange, so we will only consider selling it after it is successfully listed on Binance. Before that, no matter how its price fluctuates, we will treat this investment as non-existent.
6. Does this strategy sound stupid? As I just said, 99%, or even 99.9% of Dogecoins will not survive for more than 3 days. This means that in 99% of cases, we are just giving money to scammers.
7. Let's do some calculations. 15 TUGOCoins are created in 1 hour, 15×24 = 360 TUGOCoins are created in 1 day, and 360×30 = 10,800 TUGOCoins are created in 1 month. Assuming we start adopting this strategy on January 1, 2023, and 6 months have passed, there will be a total of 10,800×6 = 64,800 TUGOCoins.
8. We invested 0.01 eth for each Dogecoin, which is about 150 RMB at the current price. So in the past six months, we have invested a total of 150×64800 = 9720000 RMB, which is almost 10 million. Throwing money into this market every day, and giving money to scammers, every day for half a year, it really sounds stupid.
9. But here comes the crux of the matter. In the past six months, a Pepe has appeared. I have posted many videos about Pepe before, so I won’t say more here. Because we will invest 150 yuan in each Dogecoin contract when it is just established, we will definitely not miss Pepe.
10. It took Pepe only one month to log in to Binance. Among the 64,800 Dogcoins we invested in the past six months, Pepe's investment was undoubtedly the most successful. So how much money did he make from this investment?
As of the time I wrote this article, the total market value of PEPE is 60 billion, and since we have not sold since we invested, we still own 1% of PEPE. How much is this investment worth now? The answer is 600 million!
Let’s review our seemingly “idiot” investment: 360 Dogecoins are created every day, and a total of 64,800 in half a year, of which 99% are probably scams. However, we invested without any exception and without any screening, without any thought. In half a year, we threw out 10 million, but how much did we earn in the end? 600 million.
Okay, stop fantasizing, this is just a calculation.
4️⃣What to do if you don’t have that much capital?
The most common problem is that we don't have so much ammunition, what should we do? This can be broken down into two problems to solve specifically.
1. The first problem: large market capitalization occupies too much capital
A meme with a market value of 1 billion yuan requires 10,000 U. For example, if Pepe is worth 3 billion yuan now, it will take up 30,000 U. If you don’t have much money, then invest less in large-cap stocks, such as buying only 1,000 U. If the meme worth 100 billion yuan is produced in large-cap stocks, you can only earn 100,000 U. There is no other way, because you have less capital.
Fortunately, there are not too many memes with large market capitalization: pepe, bonk, wif, ordi, sats. And at least according to the rules of the last bull market, there will not be only one meme worth hundreds of billions.
2. The second question: There are an infinite number of small-cap stocks
There are all kinds of memes being created every day. Do you have to buy every one of them? Of course not. First of all, you should have a minimum standard for the market value of memes. For example, the bottom line in my table is 1 million market value. You should not touch memes with a market value below 1 million. But even with this standard, there are many memes that reach 1 million market value and then return to zero every day. Then you can raise the bottom line of market value to 5 million. If you find that this still doesn't work and too much has been invested, then you can raise it to 10 million. This bottom line number can only be adjusted according to your investment preferences and the size of your capital. As long as you invest for a period of time, you will find a style that makes you more comfortable.
Therefore, the solution to the problem of having little money is: do not invest in companies with too small a market value, and invest less in companies with too large a market value.
Next, let’s talk about a few points of attention:
Get the bull market to end
We are only 25% of the way through the bull market, and the real craze for memes will be in the second half of the bull market, so it’s still early, so buy now and don’t sell when the price goes up or down. In addition, a meme’s 100-fold increase is usually completed within 1 month, so if it increases 5 times in 1 day and you think it’s too good and sell it, you may regret it 1 month later.
When the market is calm, you can adjust your positions dynamically
When the meme is not crazy, there will be natural and random ups and downs every day. At this time, you can appropriately adjust your position to reduce costs. Friends who are good at operation can even reduce the holding cost to zero before the meme takes off. But it should be noted here that you should adjust your position when the meme fluctuates little, not when it fluctuates greatly. Because once the meme takes off, you want to sell it first, and then you may never get it back, which is quite anti-human.
Don’t be prejudiced against memes
We can't understand most memes. We don't understand what they mean or why they have risen so high. Intuitively, we think it can't rise anymore. At this time, we must keep in mind our operating guidelines: traverse all memes without filtering. The purpose of traversal is to abandon our subjective judgment, because I assume that our subjective judgment is inaccurate, which is of course very anti-human. A better way is to set a market value red line. Below the red line, you can make subjective judgments, and above the red line, you don't have to make judgments and must open a position. For example, a meme is now worth 3 million, and you think it's too outrageous, so you don't buy it. Look again in 1 month: 30 million market value. If you set the red line to 30 million, then no matter how uncomfortable you feel, you must open a position, regardless of whether you can understand it or not.
Finally, I would like to say that the essence of this method is actually the track theory in VC investment.
Suppose you are a VC with tens of billions of dollars in your hands, and you are optimistic about the development of AI in the next 10 years. Then the track theory says that you can invest in all AI-related startups, because among these companies there will inevitably emerge one with a market value of hundreds of billions in the future, and as long as you invest in this one, you can get a thousand-fold return, even if all other investments are zero.
The characteristics of memes are somewhat similar to VCs. In the end, one or two companies will win and become the absolute leaders with a market value of hundreds of billions, and the rest will become mediocre.
