Due to the continuous rise of Bitcoin and the lack of signs of a bull market for altcoins, as well as the potential for meme coins to generate wealth, this bull market has been jokingly referred to as the “non-intercepting bull market” by the community.
Community’s Reverse Education of VC
Meme Coins Temporarily Shoulder the Responsibility of Mass Adoption
Will the Season of Altcoins Come after the Meme Season?
It took Doge 4 years to surpass a market value of $1 billion, while BOME achieved this in just 3 days. It seems that more retail investors prefer to invest in meme coins rather than VC-backed coins. However, as meme coins gain popularity among retail investors, VCs seem to be a bit reluctant.
Prominent VC firm a16z launched a series of attacks on meme coins. They first blamed the SEC for allowing meme coins to flourish while not protecting true blockchain innovations. a16z Crypto CTO Lazarrin later complained on X platform, “Meme coins are a waste of time.”
Compound VC Managing Partner Michael Dempsey also criticized meme coins for causing many true builders to leave the industry. However, blaming meme coins for disrupting cryptocurrency innovation quickly drew criticism from the crypto community.
Solana co-founder raj came out in defense of meme coins and sarcastically questioned the argument that meme coins caused true builders to leave. If these so-called true builders are afraid of even meme coins, they will never succeed.
Retail investors, on the other hand, questioned the value coins promoted by VCs. The debate about the value of meme coins turned into a roast of VC coins/value coins.
Community’s Reverse Education of VC
VCs, who like to educate users, have been educated by users.
Firstly, meme coins are not responsible for disrupting crypto innovation. @MarinadeFinance sarcastically stated that people often look for excuses, but no one or nothing can stop them from building something truly innovative.
@XBEBEeth added that no one hates these true builders, they just hate the “builders” who deceive users with fancy narratives.
Instead of attacking meme coins, it is better to reflect on whether the innovation promoted by VCs is genuine. @mfer7166 believes that pseudo-innovation should be criticized. The problem lies not in meme coins, but in the lack of epic narratives in the current cycle.
Retail investors can only speculate on meme coins and express their helplessness.
AI+Crypto, DEPIN, RWA, modularization, Bitcoin Layer2… VCs are becoming more skilled at creating narratives that are not easily understood. They prefer projects to incorporate these concepts and sell them to second-tier retail investors, hoping that they will buy into these long-term visions.
Retail investors used to fall for this too, hoping for widespread adoption of new narratives and following projects endorsed by VCs, even if they couldn’t profit much.
But times have changed. Retail investors have begun to realize that the technological innovation promoted by VCs seems to be just hype, and there hasn’t been much progress in implementation. In terms of speculation, following VCs not only doesn’t bring benefits, but may also result in heavy losses.
The theory of the “non-intercepting” bull market that was mentioned earlier resonated with many people. However, @connectfarm1 pointed out that there is no such thing as a non-intercepting bull market. Currently, so-called value coins have seen an increase in market capitalization, but their prices have not risen significantly. Retail investors are frustrated by these high market cap, overvalued, low liquidity value coins that keep unlocking.
The new value coins listed on exchanges have generally lost their ability to generate wealth. WLD was valued at $3 billion before its launch and reached a fully diluted valuation of $28 billion on the day of launch, equivalent to OpenAI’s valuation at the time. How much growth space is left for the secondary market with such a high market cap? New coins like the leading Bitcoin Layer2 project Merl have also experienced a decline in price after listing.
In addition, there are too many new concepts and the rotation of sectors is too fast, making it difficult to understand. @Eason_Jiang_ shared their experience of holding a value coin, where the price went on a roller coaster ride and returned to where it started. Profits were greatly reduced or even wiped out because attention was diverted to other projects.
Retail investors’ strategy of buying low and selling high no longer seems to work. The Ethereum Layer2 leader and value coin representative, ARB, dropped from $2 to $1, but VCs unlocked a large amount of tokens and made a profit, potentially leaving retail investors trapped.
In the current cryptocurrency market, which has not yet seen widespread adoption, 90% of the market is driven by speculation. Although meme coins have no intrinsic value, they offer retail investors a closer chance of making hundreds or even thousands of times their investment compared to value coins.
@mfer7166 expressed the sentiment of many retail investors, saying, “Meme coins are simple, and it’s better to release them. Basically, it’s like gambling in a relatively fair environment. Their biggest value is the potential to increase by 100 times.”
Although the fairness of meme coins can be questioned, retail investors have a higher tolerance for meme coins compared to VC coins/value coins.
Not all VCs are opposed to meme coins. Some VCs are flexible and join in when they can’t beat them.
Mechanism Capital has started accumulating meme coins. Co-founder Andrew Kang announced on their social media platform that Mechanism Capital has already completed its first round of accumulation for 2024, focusing on meme tokens and NFTs with a Trump theme.
DWF Ventures also publicly stated that they are interested in investing in projects with large-scale community participation in the future.
DWF Ventures believes that meme coins will become a new go-to-market strategy for many ecosystems and projects. They believe meme coins will serve as an effective marketing strategy in the following verticals: infrastructure ecosystems, consumer and gaming, and new projects with a meme coin background.
Variant co-founder Li Jin has started hosting a meme marathon and wrote, “Born too late to explore the Earth, born too early to explore the universe, born just in time to host a meme hackathon.”
Meme Coins Temporarily Shoulder the Responsibility of Mass Adoption
Seemingly valueless meme coins may be carrying the burden of mass adoption.
@mdudas refuted a16z CTO’s claims, stating that meme coins have become a significant factor in enabling the adoption of public blockchain ecosystems.
After the founder of Solana personally promoted Silly Dragon, Solana continued to benefit from the meme craze. The popularity of BOME made Solana’s active addresses rank first. Within 3 days of BOME’s launch, the number of active wallet addresses on Solana increased from 1.24 million to 2.42 million, a 95% surge.
Additionally, Solana’s on-chain network fees and revenues have also experienced significant growth as a result.
What was once considered a blockchain with few users, Solana has seen people actually using it because of meme coins. Solana’s tremendous success with meme coins has garnered attention from other public blockchains, who are now following suit.
The founder of Base stated that meme coins will be the key to attracting millions of users to the Base network. The Arbitrum community is proposing the establishment of a Memecoin fund.
Some public blockchains have even launched their own meme coins. On March 17, Aptos released its official meme coin, $LME. On March 18, Bitcoin Layer 2 blockchain Ligo announced the launch of the meme coin SOLIGO on Solana.
There are also blockchain meme innovation competitions to encourage meme coin innovation on-chain.
BNB Chain recently announced the launch of the “Meme Innovation Battle” event, competing for a total prize pool of $1 million. TON announced the launch of Memelandia, a meme and community token culture center, which rewards top meme and community tokens on the TON network.
The TON Foundation also airdropped over $2 million worth of TON to active meme coin traders in the ecosystem.
Fantom has started developing meme framework standards. Recently, Fantom Foundation co-founder Andre Cronje tweeted that they are busy conducting due diligence on memecoins in order to establish a framework for launching, supporting, and nurturing safe meme coins on Fantom.
Ethereum co-founder Vitalik Buterin previously mentioned in regard to meme coins: “In fact, meme coins not only contribute to the traffic of many public blockchains, but some meme coins are starting to do something.”
Shib, known as the “Dogecoin killer,” announced the launch of the Shibarium Beta version last year, aiming to reduce the load on the blockchain network and improve the user experience of metaverses and gaming applications.
Meme Coins Taking the Lead
Meme coins and value coins are not completely opposing forces. For most retail investors, they want to participate in both races.
In a typical bull market, Bitcoin rises first, followed by Ethereum, which in turn drives the surge in popular altcoins. Finally, the entire crypto market enters a phase of widespread growth, and meme coins start to rise.
However, the order of sector rotation in this cycle seems to have been rearranged, with meme coins taking the lead as the main focus of this cycle.
After the meme explosion, will the altcoin season dominated by value coins still come? This is the question that retail investors are most concerned about.
Shengyu, in a recent interview, stated that the altcoin season may not come. Shengyu mentioned that the characteristic of this cycle is that funds primarily flow into Bitcoin through ETFs and other channels. When these funds will flow into other cryptocurrencies remains to be seen.
Crypto trader Thiccy also expressed pessimism about the possibility of the altcoin season. Thiccy pointed out that due to the increasing number of projects launching their own coins, the growth rate of fully diluted valuation has exceeded that of circulation, increasing by about 70% since the beginning of the year.
However, some investors still believe that the altcoin season is not over. In a market where value coins are generally not favored, crypto researcher @0xNing0x believes it is the best time to accumulate value coins.
According to @0xNing0x, the golden rule of investment has always been “buy when others sell and sell when others buy.” As the proportion of meme coins in everyone’s investment portfolio increases, true high-risk-return ratio alpha opportunities are likely to emerge in the value coin sector.
Related Reports
Arthur Hayes: US Treasury Injects $1.4 Trillion Liquidity in May, Driving the Return of the Crypto Bull Market
Arthur Hayes’ Latest Article: Printing Money Will Accelerate, I’m Increasing My Chips… The Crazy Bull Market Is Not Over
How to Get Rich in a Bull Market: Consider These Six Principles and Two Strategies.