In the past few months, the cryptocurrency market has seen an unprecedented frenzy of speculation, with more than 1 million new Meme coins launched in April alone. These figures show investors' enthusiasm for this type of high-risk, high-return digital asset.
This frenzy of speculation was mainly driven by the market's expectation of quick profits. Some early investors realized high returns by buying these newly issued Meme coins and selling them quickly after the price soared. However, as more and more Meme coins entered the market, the risks faced by investors also increased.
Despite the strong market performance, this phenomenon of excessive speculation is increasingly showing great risks. This craze may lead to a market bubble, and once the bubble bursts, it will have serious consequences for investors and the entire cryptocurrency market.
Scams and potential concerns remain
As the number of Meme coins has increased dramatically, many scams and unfair practices have also appeared in the market. Since this type of cryptocurrency lacks actual value support and most investors are looking for short-term profits, Meme coins have become a hotbed for scammers.
Many newly launched meme coins are actually so-called “pump and dump” scams, where scammers first buy a large number of these coins, then drive up their prices through social media and celebrity effects, and finally sell them at the high point for a profit, leaving unsuspecting investors to bear the losses.
There are also opponents of Meme Coin who mentioned that the new project Rug has lower costs. These funds could have been invested in "legitimate" projects, but now they have flowed into the pockets of scammers, which does not help the market at all.
Take the recently stolen pump as an example. I did try it for a while, and without exception, I was completely defeated. It was basically a one-wave process: issue coins - promote - ship - run away. So at the moment when local dogs are horizontal, everyone must make careful selections before entering the market. Don't just rush in rashly after someone says that buying a certain coin will make you rich. Although we also grasped the GIKO of a hundred times, luck also played a big role.
There have been many cases recently where investors have suffered huge losses from investing in Meme coins. Everyone should be cautious when investing in such high-risk assets, and it is recommended to only invest in cryptocurrencies that have practical application value and technical support.
In addition, regulators have also begun to pay attention to this phenomenon. The U.S. Securities and Exchange Commission (SEC) recently stated that it will strengthen supervision of the cryptocurrency market, especially those Meme coins that have fraud risks. The SEC emphasizes that one should fully understand the investment risks and not be fooled by short-term high returns.
How to seize the opportunity of Meme hype?
Predict price trends by tracking community participation and measuring market sentiment: Google Trends is one of the common ways to measure market interest in a topic, and Twitter sentiment indicators help measure the sentiment of market participants and can sometimes be leading indicators. In addition, the number of MEME project currency addresses and the number of MEME project Twitter followers are also very important indicators of concern. In addition, whether it is distributed to a wider group for free and fairly is also a very important indicator, because free and fair distribution often has higher market attention and popularity.
Grasp some characteristics of potential MEME tokens: generally, the market value is small, because it is not easy to manipulate the market to surge if the market value is too large (for example, DOGE, SHIB, and PEOPLE did not have a large market value at the beginning); MEME tokens have a certain narrative consensus value, such as DOGE's reward culture; SHIB said it would build a defi public chain ecosystem; PEOPLE said it would buy the US Constitution, LUNC took measures to destroy deflation, TSUKA spread the spirit of Tibetan Buddhism, and so on; there are exchanges paying attention and listing. As a very important force in the crypto market, exchanges cannot be underestimated in promoting MEME tokens.
Grasp the rotation cycle of MEME tokens: As mentioned above, the rotation cycle of MEME tokens is in the middle and late stages of the bull market. After the market lacks hot spots, MEME tokens tend to attract the attention of speculative funds. For example, the last round of bull market experienced a basic sector rotation: cash → BTC/ETH → Defi/L2 → Gamefi/ Metaverse / NFT → DOGE/SHIB/ Animal Coin → cash.
Using valuation methods to seize investment opportunities in MEME tokens: MEME tokens rely on consensus to accumulate value, so the speed and breadth of information transmission are very critical factors. The market value of MEME tokens usually has several stages: 1 million US dollars, 5 million US dollars, 10 million US dollars, 100 million US dollars, 300 million US dollars, and more than 1 billion US dollars.
The continued popularity of MEME is like a mockery of the game organized by these so-called core circles. This mockery not only questions the technology itself, but also deeply criticizes the blind enthusiasm of the entire cryptocurrency market for new technologies and its neglect of their substantial applications.
"I don't understand it anyway, so I might as well speculate on MEME." The old leeks in the community seem to be overwhelmed, and the new leeks are even more confused. Under the rapid iteration of the cryptocurrency narrative, MEME culture has flourished.
Let’s go back to the questions that the community has been asking recently: “Is MEME the end of blockchain?” or “Value investment is dead, MEME is immortal?” Although these questions seem absolute and even a little extreme, we have to admit that the biggest role of blockchain in the next ten years is still speculation, which may be the truth.
Later, I will bring you analysis of leading projects in other tracks. If you are interested, you can click to follow. I will also organize some cutting-edge consulting and project reviews from time to time. Welcome all like-minded people in the cryptocurrency circle to explore together. If you have any questions, you can comment and ask questions
