Murad believes that Memecoin will create millionaires, multimillionaires, and even billionaires.
Compiled & edited by TechFlow
Guest: Murad Madhov
Podcast source: Decypher Podcast
The Memecoin Supercycle Will Mint Billionaires - Murad | Ep 14, Murad | Memecoin
Air Date: October 2, 2024
Background Information
Murad Madhov is an entrepreneur and investor who has a unique theory: the next best performing assets will be Memecoins, crypto assets based on online memes. He believes these assets will create millionaires, multimillionaires, and even billionaires.
Reality: Why altcoins are dying
Murad discussed the current status and future of altcoins. He mentioned that since 2016, his focus on cryptocurrencies has gradually shifted to altcoins, trying to understand their nature in depth. Murad pointed out that all altcoins currently listed on Binance have performed poorly, with almost all falling, with only two exceptions.
Murad emphasized that the crypto industry is not a technology-led industry, but an industry of asset production and speculation. He believes that it takes time to build a community, at least a year. The success of altcoins depends on whether they can make ordinary people rich. He also mentioned that the relationship between altcoins and crypto tokens is more like opposition than simple competition.
The Importance of Meme Coins
Murad further elaborated on his views on altcoins, believing that they are not just products of popular culture, but also symbols of the community. He pointed out that the success of altcoins lies in how they evolve and adapt to market needs. He reviewed the development of the crypto industry, mentioning the first Oscar wave in 2014 and the ICO boom in 2017, believing that these have driven the rise of altcoins.
He analyzed the current market changes and pointed out that many DeFi projects are now listed at high valuations, making it difficult for ordinary investors to obtain projects with real potential. Murad emphasized that ordinary investors are gradually realizing that the token itself is the product, not the software. He believes that the current crypto industry is still an industry that focuses on asset production, and technology is only its subsidiary.
Future Trends
Murad believes that the future trend will be the close integration of altcoins and communities. He believes that only those altcoins that can continuously evolve and adapt to market changes can win in the competition. He mentioned that market changes and trends are not only factors within the industry, but also include the influence of the outside world, and the two need to be combined for analysis.
The Rise of Memecoins: The Ushering in a New Era of Crypto
Murad further explored the rise of Memecoins, which he called a “post-software” phenomenon. He pointed out that the market has seen Memecoins such as Doge, Pepe, and SafeMoon reach astronomical market caps, proving that the value of these tokens is not dependent on actual products. Murad believes that this shows that the software or platform itself has never been the core product of a crypto project.
He mentioned that many projects currently favored by venture capital are still traded at a valuation of $7 billion despite only $500 in daily revenue, which further shows that their value is not based on cash flow but on "imitation premium."
Murad made a controversial point: all altcoins are actually memecoins, just more complicated versions. He explained that if a token is neither a store of value nor distributes income, then it is a memecoin.
Community and the value of tokens
Murad emphasized that the real product is the community and the token, not the software itself. He believes that this concept can help people analyze the entire cryptocurrency universe from a new perspective, not just Memecoins or technical projects. He mentioned that many founders and venture capitalists of projects claim that they cannot distribute income because of regulatory reasons, but he believes that in many cases it is just their interests.
He warned that once revenue distributions begin, investment bankers use Excel to estimate a project's fair value, which could be significantly lower than current market valuations. Therefore, Murad emphasized that any project with no cash flow or revenue distribution can be considered a Memecoin, a perspective that provides a new perspective for understanding the cryptocurrency market.
Views on the future of the industry
During the conversation, the host mentioned that his father’s interest in DeFi stems from its seemingly legitimate financial infrastructure, suggesting that DeFi brings a certain value proposition to the crypto industry.
Murad responded that although he believes Memecoins are the new wave, this does not mean that the amount of money flowing into the industry will decrease. His point is that the rise of Memecoins may attract more investors and capital inflows, and the crypto industry still has the potential for growth and innovation.
Memecoins and the Importance of Cultural Communities in Crypto
Murad highlighted the impact of Memecoins on crypto tokens, arguing that they are not an attack on crypto, but a "vampire attack" on crypto tokens. He pointed out that many DeFi projects can function normally without tokens, such as Uniswap, which shows that the best products do not necessarily need tokens, and the best tokens do not necessarily need actual products.
Murad believes that ordinary investors are gradually realizing that all tokens, whether they are technically backed or just meme images, are actually gambling tables in a casino. He mentioned that ordinary investors are beginning to wonder why they should bid for a gambling table that is already worth $10 billion instead of building a real community to make ordinary people rich and achieve wealth growth. He believes that Memecoins are recreating the scene of the ICO boom in 2016 and 2017, and the key lies in human motivation and needs.
The power of community and cultural construction
Murad emphasized that a real community is a key factor in driving token performance. He believes that a strong community is like a "cult" in which members' loyalty and enthusiasm for tokens will lead to supply constraints and form a "diamond hand" effect. Even if the price of tokens rises, community members will not easily sell them because their sense of identity and belonging to the tokens make them more willing to hold on.
He pointed out that the establishment of a community requires ordinary people to gain wealth growth. Historically, many successful crypto projects have built strong communities by allowing investors to profit from them. For example, Bitcoin, Ethereum, Solana, and some Meme tokens such as Shiba Inu and Dogecoin have attracted a large number of ordinary investors who have gained considerable returns by holding tokens, which has made them closely associate their identities with these tokens.
Token Distribution and Wealth Effect
When talking about airdrops, Murad pointed out that airdrops are one-time events and most people will eventually sell them in exchange for ETH or stablecoins. He believes that unlike the wealth effect of Memecoins, the success of Memecoins lies in the fact that their token distribution is dynamic, and the proportion of core holders increases over time. When small tokens grow into medium-sized tokens, the vast majority of the supply will be concentrated in the hands of those firm believers, which makes these tokens have great potential for future demand growth.
Murad also mentioned that a true "cult" community needs to experience market fluctuations and tests, and only after experiencing several sharp declines can the community's firmness and persistence be proven. This experience makes the holders in the community more determined, thus being able to drive a rapid increase in prices when demand comes.
Crypto Market Trends for Memecoins
Murad highlighted his investment philosophy on the current crypto market, with a particular focus on Memecoins, which he believes have far outperformed other tokens in the market, especially in the context of Bitcoin.
Murad mentioned that despite Bitcoin attracting a lot of institutional investment, only 42 tokens have outperformed Bitcoin in the past year, 13 of which are Memecoins, a phenomenon that clearly shows the trend of the market.
Memecoins Performance
Murad pointed out that Memecoins have performed extremely well in the market, and many Memecoins have brought much more benefits than other types of tokens. He mentioned that in the past 40 weeks, when the price of Bitcoin has pulled back, Memecoins have usually been the tokens that have rebounded the most. This trend shows that ordinary investors are still enthusiastic about Memecoins.
Future market trends
Murad believes that if future market cycles are similar to the past, tokens that performed well in 2024 will continue to perform well in 2025. He mentioned that in the third year of each cycle in history, certain industries or tokens will have strong performance. For example, Ethereum and Ripple in 2016, DeFi and NFT in 2020, and other projects have achieved huge gains in the late stages of the cycle.
Social psychology and investment behavior
Murad stressed that investor behavior is often influenced by social psychology. He pointed out that many ordinary investors will imitate the investment behavior of successful people around them, such as stories of friends or family members making profits through Memecoins. This imitation effect will cause more investors to flock to the Memecoins market, thereby driving up prices.
He mentioned that as more ordinary investors enter the market, they will tend to look for investment opportunities similar to the success stories around them, which will further promote the craze of Memecoins. He believes that 2025 will be a year of outstanding performance for Memecoins and AI tokens, and there may be a parabolic growth.
Ethereum and Solana: Casinos of the New Era
Murad discussed why he is particularly interested in Memecoins on Ethereum and Solana, noting that the ecosystems of both platforms have made them “casinos” in the crypto market and have accumulated a lot of wealth and users over the past few cycles.
Ethereum and Solana Ecosystem
Murad emphasized that the success of Ethereum and Solana lies in their ability to attract a large number of users and investors. He described Ethereum as a "big casino" because it became the main medium of exchange during the ICO boom in 2016 and 2017, and then continued to play an important role in the rise of DeFi and NFT. This makes Ethereum not just a blockchain platform, but also an economy in which users conduct various transactions and investments.
Solana is in a similar situation, as it is building its own ecosystem by attracting Memecoins and DeFi activity. Murad believes that other emerging blockchain platforms, such as Aptos and Sui, hope to emulate the success of Ethereum and Solana and become new options for “value storage.”
Meme Coins as a User Acquisition Tool
Murad pointed out that many emerging blockchain platforms are using Memecoins as a tool to attract users. He believes that Memecoins can incentivize users to participate on these platforms, thereby increasing trading activity and liquidity. He mentioned that although the teams of these new platforms hope to increase the value of their tokens through Memecoins, in most cases, these Memecoins are driven by teams or venture capital companies rather than by real communities.
The importance of “idle wealth”
Murad further explained the concept of “idle wealth,” whereby investors on Ethereum and Solana hold large amounts of assets that could be moved to Memecoins. He believes that if these investors could be convinced to put 5% or 10% of their assets into Memecoins, it would bring a huge inflow of funds to these tokens.
In contrast, Murad is less concerned about other chains such as Tron and Aptos because he believes that these chains lack sufficient "idle wealth" and total value locked (TVL). This makes them more challenging to attract funds and relies on exchange listings or users to transfer across chains, which adds friction.
Murad's opinion highlights the unique position of Ethereum and Solana in the crypto market and how they attract users and funds through Memecoins. He believes that the ecosystems of these two platforms make them the "casinos" of the crypto market, and that future market trends will continue to benefit from the strong user base and idle wealth of these platforms. At the same time, he is cautious about the potential of other emerging blockchain platforms, believing that they need more user and financial support to achieve similar success.
The Evolution of Memecoins: From Banks to Memes in a Moment
In this conversation, Murad discusses the value and future trends of Memecoins, emphasizing the shift between traditional finance and the crypto market and how it affects the development of Memecoins.
Memecoins Valuation and Its Relationship with Blockchain
Murad mentioned that while Memecoins may have a valuation that exceeds some blockchains themselves, this is often coincidental. He believes that the choice of blockchain is important in early valuations (e.g., under $3 billion) because the "idle wealth" on these chains can drive the rapid growth of Memecoins. However, as the market develops, the value of Memecoins may become less relevant to the blockchain they are on.
The Impact of Centralized Exchanges
Murad predicts that by mid-2025, many outstanding Memecoins will be listed on centralized exchanges, which will further promote their circulation and acceptance. He mentioned that trading platforms like Robinhood are emerging, allowing users to quickly purchase Memecoins through traditional bank accounts, eliminating the complexity and fees of blockchain transactions. This simplified purchasing experience may attract more ordinary investors to enter the Memecoin market.
The optimal range of risk-return
Murad discussed the market capitalization range he is focusing on, which is $5 million to $200 million in Memecoins. He believes that this range offers a better risk-reward ratio. While some large-cap Memecoins may continue to rise, he believes there are better investment opportunities in mid-cap Memecoins. He does not recommend investing in lower-cap Memecoins because they are riskier and more volatile.
Classification of Memecoins
Murad divides Memecoins into two categories: one is "PvP" (player versus player), which is similar to quick transactions and speculation; the other is "PvE" (player versus environment), which is Memecoins for building communities and long-term investment. He said he prefers the latter, focusing on long-term community building rather than short-term quick transactions.
Holding strategy and future outlook
Murad plans to hold almost all of his Memecoins for the next 14 months, before evaluating them in October or November 2025. He believes this will be a super cycle for Memecoins, emphasizing the concept of a "conviction super cycle" that encourages investors to stop short-term trading and focus on community building and long-term holding.
Accelerationism and the dynamics of Memecoins
Murad dives into the rate at which Memecoins are produced, the importance of community building, and his thoughts on investment strategies. He believes that the current market environment has led to the rapid growth of Memecoins, while also changing the risk-reward dynamics for investors when looking for potential winners.
Accelerated Production of Memecoins
Murad proposed the concept of "Memecoin accelerationism", emphasizing that the number of new Memecoins appearing every day is increasing dramatically. He predicted that in the future, hundreds of thousands of new Memecoins may be generated every day. This phenomenon makes it more difficult to find the real winners in this market, because a large number of new projects will dilute investors' attention and capital.
The importance of community
Murad stressed that it usually takes at least a year to build a strong community. He believes that established communities (i.e. "cults") have an advantage in future competition because these communities can provide higher support and loyalty. He prefers to invest in Memecoins that already have a good community foundation rather than chasing emerging projects.
Changes in risk-reward
Murad pointed out that as the market changes, the risk-return of investing in small Memecoins is decreasing, while the risk-return of investing in mature Memecoin communities is increasing. He mentioned that in the past, small-cap Memecoins had greater upside potential, but now large-cap Memecoins have a higher chance of upside. He prefers to choose Memecoins that are lower in price but have active communities.
Avoid Cabal
Murad discussed the cabal phenomenon in the Memecoins market, which refers to the manipulation of the market by small groups to influence the price of Memecoins. He said that he is against this centralized manipulation and prefers to choose decentralized and naturally growing Memecoins. He hopes that the projects he invests in can conduct price discovery without human intervention and remain fair and transparent.
Navigation of the Memecoins Industry
Murad discussed the future development trends of the Memecoins industry, especially how to find investment opportunities in an increasingly competitive environment. He mentioned that as more players enter the market, ordinary investors may face more challenges, but he believes that a path to success can be found by focusing on real communities and "culture".
Challenges for ordinary investors
Murad believes that many ordinary investors may suffer losses when trying to speculate in Memecoins, and eventually realize that Memecoins built on strong communities (i.e. "cults") are better investment options. He recommends investors to skip small-cap projects because they have an extremely low probability of success, with about a 95% chance of not being profitable.
Identifying Authentic Communities
Murad stressed that there is a lot of fraud in the Memecoins industry, especially that many influencers are not really looking out for the interests of investors. He mentioned that 99% of influencers may be manipulating the market and using their influence to manipulate the price of Memecoins. He suggested that investors create a checklist to identify real communities and look for projects that perform well in multiple dimensions, including fair token distribution and active community support.
Future Trends of Memecoins
Murad predicts that future Memecoins will move from simple funny images and animal themes to more complex and serious themes. He believes that Memecoins are actually "tokenized communities" and that in the future there will be Memecoins related to various concepts, including each word, number, sentence, etc. He believes that in such an environment, only a few truly valuable Memecoins will be able to stand out.
The rise of sports coins
Murad proposed a new category - "sports coins", which are tokens that are not just representatives of the community, but also tokens that carry a certain philosophy or belief. He believes that the successful Memecoins in the future will be those that can trigger a strong emotional response. He calls it the "belief super cycle" and believes that these tokens will become representatives of higher-level culture and movements.
