OPENING REMARKS

The upcoming Bitcoin halving event, the wave of Bitcoin ETFs, and the continuously fluctuating market sentiment have collectively driven not only the extreme volatility of Bitcoin but also sparked a revival of meme cryptocurrencies led by tokens such as $PEPE and $WIF. In just the past month, these tokens have surged by over 600%.

According to data from Coingecko, in the first quarter of 2024, MEME coins were the most profitable cryptocurrency trend, with the average return of their main tokens reaching 1312.6%. Following closely behind is the newly introduced Base, which has become a key platform for trading MEME coins, thanks to its large active user base on DEX and low transaction fees, making it the preferred place for trading small-cap currencies.

The chart below shows the performance of key MEME coins compared to Bitcoin since early March.

Source: TradingView

It is worth noting that the profitability of MEME coins is 4.6 times that of RWA and 33.3 times that of Layer 2 (according to Coingecko, Layer 2 had the lowest return rate in Q1 2024).

Source: Coingecko

If you find these charts confusing, there's no need to worry. Many people find MEME coins and the broader crypto culture somewhat difficult to understand. For the uninitiated, MEME coins are essentially digital tokens that, apart from inspiring "emotions" and fostering a sense of community, have no practical use. While some may view them as worthless, the fact is that they have to some extent integrated well into today's experience-centric economy.

The market teaches us that the fundamentals of an asset often play a secondary role in its potential for value appreciation. MEME coins are a form of internet culture where people can come together and create meme value out of thin air.

Source: Pepe on X

The GameStop phenomenon of 2021 is a perfect example, laying the foundation for the wild success of meme coins such as $DOGE, $SHIB, and the recent $PEPE and $WIF.

Those who are adept at early cultural trend spotting may perform well with MEME coins, as they can predict where people's attention might shift.

In an era where our attention is constantly being fought for, it's not surprising that MEME coins can quickly become valuable. However, our fleeting attention means that interest may fade as quickly as it came. This is a double-edged sword, often leading to people feeling jaded when prices no longer rise, typically resulting in sudden market downturns when everyone turns to the next big event.

The Surge of MEMECOIN

From 2020 to 2021, meme coins became major players in the cryptocurrency scene. Leading coins like $DOGE and $SHIB not only established their own positions but also paved the way for smaller new coins. Their popularity demonstrated the unique appeal of the meme coin market, driven by speculative investment, volatility, and passionate communities.

Take Dogecoin, created based on the Shiba Inu meme, as an example. It now represents a significant cultural movement within the cryptocurrency. It shows how an internet meme has evolved into a community-driven movement, with supporters deeply invested in both the meme and the currency. As the first meme coin, $DOGE still serves as a key indicator of interest within the crypto community, despite not reaching its "DOGE to $1" goal. Elon Musk's tongue-in-cheek support and his decision to accept $DOGE for purchasing Tesla significantly boosted its visibility, highlighting its influence and growth potential.

The meme coin market has evolved beyond dog-themed coins to showcase outstanding performance in cat-themed coins. This change highlights the dynamic nature and growing diversity of the meme coin ecosystem.

Source: Messari

Over the past four years, the development of more complex L1 and L2 ecosystems has been noteworthy, with some creating unique space for meme coins. In particular, Base has attracted significant attention, with $DEGEN, for example, reaching a market value of $800 million within a few weeks of its launch.

Since its launch in August 2023, Coinbase's Layer 2 platform has welcomed 5.03 million new users, especially experiencing rapid growth in March 2024.

Source: DuneAnalytics

As of today, some leading meme coins on Base, including $Brett, $Degen, $Toshi, $Normie, $Mochi, and $Doginme, have reached a total market value of $1.6 billion.

Apart from Base, meme coins on mature L2 platforms like Arbitrum and Optimism have seen a decline in popularity and support. These platforms are primarily designed for DeFi, which remains their core focus. Therefore, as DeFi regains momentum, they are expected to perform well.

Exploring these other L2 alternatives, notable meme coins can be found on ZkSync, such as $ZORRO and $MEOW, as well as currencies on Scroll and Linea, such as $SCROLLY and $LUBE.

Beyond the Ethereum ecosystem, Solana has become a significant force for meme coin trading in the L1 network. It leads in daily active DEX traders and trading volume, surpassing user liquidity in other major ecosystems. This makes Solana the center of a vibrant meme coin market. The enthusiastic participation of the Solana community in meme coins and small-cap trading gives it the ability to challenge, and sometimes even surpass, the daily USD trading volume of Ethereum-based DEX.

Solana is home to several leading meme coins, such as Dogwifhat, $Bonk, Cat in a Dog's World, Jeo Boden, Book of Meme, $Slerf, and $PopCat. The total market value of the top 10 meme coins on Solana has reached $7.6 billion.

Source: Messari

In the Solana ecosystem, Dogwifhat has emerged as a highlight of meme coins this year. This dog-themed meme coin is raising funds to purchase ad space on the Las Vegas Sphere, known for its display capabilities both inside and outside. So far, it seems that we are about to see an image of a cute dog wearing a knitted hat on the spherical structure. This event is expected to elevate the enthusiasm for meme coins to a new level.

Summarizing this section, it is noteworthy that the total market value of all meme coins is currently around $60 billion. Among them, cryptocurrencies such as Dogecoin, Shiba Inu, Dogwifhat, and Pepe hold prominent positions in the top 50 cryptocurrencies by market value. However, this number is still lower than the nearly $100 billion peak driven by Dogecoin's significant growth in early 2021.

Source: Coingecko

Evaluating the Success of MEME Coin Investments

At the beginning of the article, we mentioned that those who are adept at early cultural trend spotting may find success with MEME coins by predicting where people's interests might shift. However, it is evident that in the already volatile and risky crypto market, MEME coins represent the most speculative part. There are thousands of meme coin projects, but only a few can gather any community consensus, and even fewer can sustain long-term. Most projects and investors are essentially gambling, hoping for a one-time big win. Nevertheless, we cannot ignore their role in the industry and the opportunities brought by closely following the narrative.

That being said, here are some tips that may help you navigate these volatile waters:

• While real-world utility and strong fundamentals are crucial for the success of most crypto projects and companies, the operation of MEME coins is different. For MEME coins, community engagement and hype are at the core of their success. The energy and excitement of the community, amplified through social media and other platforms, drive the popularity of MEME coins. A community dedicated to their development and promotion is crucial for ensuring the stability and growth of MEME coins.
• Be prepared for price fluctuations. While these fluctuations can provide profit opportunities, they come with significant risks. Also, be aware of pump-and-dump schemes that may artificially inflate prices. Remember that negative sentiment may affect the acceptance and longevity of MEME coins more than other assets.
• Just like with other types of investments, the importance of research cannot be overstated when investing in MEME coins. With hundreds of MEME coins, ensuring that your funds are directed towards the right or at least higher-probability-of-success coins is crucial. Carefully examine the coin's history, its team, and its position in the market.
• Only invest funds you can afford to lose, recognizing the speculative nature of MEME coins. When investing in MEME coins, always have a plan for potential gains and losses. This is important because our fleeting attention may lead to people losing interest rapidly and quickly moving on to the next big event.
• Get in early. This may seem obvious, but given the nature of investing in MEME coins and the speed at which these tokens rise, it is more likely that people will sell their tokens for profit. They rise and fall just as quickly, especially when the community sentiment is superficial. The earlier you get in, the less likely you are to be caught in a sell-off.

For example, the Greythorn team has recently started closely monitoring the development of meme coins on Monad, especially after the rise of Base. This is because it is a mature, highly anticipated chain. While we are still awaiting its launch, there are signs that certain community members are beginning to foster a sense of community around meme coins through social media interactions, increasing holder numbers, and trading volume, targeting coins that show sustainable, organic growth.

The Rise of DOGINALS and Bitcoin ORDINALS

Over the past year, the crypto scene has been abuzz with the rise of Bitcoin ordinals, especially with Bitcoin ordinals, Nodemonkes, and Bitcoin Puppets all achieving significant value growth.

The introduction of inscriptions has made it possible to create NFTs directly on Bitcoin, known as BRC-20 tokens. Unlike NFTs, these tokens are stored directly on the blockchain and are assigned a serial number based on their mining order. This allows images or data to be attached to specific satoshis within the Bitcoin network.

Ordinals are seen by some as strategic investments in Bitcoin growth, now making waves in the Dogechain ecosystem. Doginals, or Doge Ordinals, are becoming a popular narrative for those betting on the increasing meme value of DOGE.

Purchasing Doginals is not straightforward, as it requires users to navigate the slow Dogechain and decide which to invest in. Nevertheless, for many, owning Doginals is becoming a symbol of dedication to the Dogechain community, and their increasing value only adds to this appeal.

With the momentum of meme coins strengthening, some believe that ordinals, especially Doginals, will also follow suit, offering a unique way to showcase digital wealth. Dogechain is seen as the ideal platform for this trend.

Magic Eden is the preferred marketplace for trading ordinals, and there are rumors of a Doginal marketplace emerging. As the value of DOGE rises, it not only boosts its own market but also the value of all related meme coins.

Conclusion

Unlike Bitcoin or Ethereum, which have clear purposes and mature technology, meme coins often lack significant real-world value or utility. Their popularity usually stems from social media and online forums.

Due to the instability and lack of solid backing, investing in meme coins carries high risk and speculation. While there are opportunities for quick profits, it is important to approach these investments with caution and thorough research.

Despite potential pitfalls, meme coins continue to attract those seeking high-risk, high-return opportunities within the crypto community.

A study titled "State of Memecoin 2023" conducted by Chainplay in May 2023 revealed that 64% of investors have purchased meme coins, while 36% have avoided them. Surprisingly, despite 70% acknowledging the existence of fraud risks, 79% view them as potential long-term investments. About 73% liken them to gambling. Additionally, 20% entered the crypto space through meme coins, and 32% of meme coin buyers are newcomers with less than a year of experience.

The growing interest in meme coins suggests that they may become even more popular and attract new investors and those already in the crypto world.

However, please remember that there are many scams and "rug" behaviors in meme coins, where creators take funds and disappear, leaving investors with nothing.

Therefore, if you are considering entering the crypto or meme coin space, be sure to proceed with extreme caution and do your homework!

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