Is Meme Coin Really Consuming VC Coin? This article will use quantitative analysis to review the true relationship between meme coins and VC coins. This article is sourced from independent researcher NingNing.
Tweet, compiled by Foresight News.
(Previous summary: 99% of meme coins ultimately go to zero, decrypting the five characteristics of Memecoin.)
(Background supplement: Study: Four reasons why cryptocurrency investors are caught in a “no-handover bull market.”)
Table of Contents:
Classical Meme Coin Leaders DOGE, SHIB vs. Classical VC Coin Leaders AAVE, UNI, DOT, MKR
Emerging White Horse Meme Coins PEPE, FLOKI vs. Emerging White Horse VC Coins TIA, RNDR, Mobile
Just Listed Stars Meme Coins BOME, SLERF vs. Just Listed Stars VC Coins ENA, Aevo
Conclusion
We are here to invest, not gamble.
Is Meme Coin Really Consuming VC Coin?
No, this is just an illusion of collective market consciousness. This illusion is commonly referred to as short-term memory dependence in neural network learning and frequently occurs in market analysis.
This thread will use a method of quantitative comparative analysis to compare the 7-day rolling volatility, correlation, and price seasonality factors of Meme Coin and VC Coin during the current upward cycle (October 23rd to present), in order to review their true relationship.
To ensure the consistency of the comparative analysis, we divide Meme Coin and VC Coin into three categories: classical leaders, emerging white horse coins, and just listed stars.
Classical Meme Coin Leaders DOGE, SHIB vs. Classical VC Coin Leaders AAVE, UNI, DOT, MKR
From the perspective of price seasonality factors, classical Meme Coin leaders and BTC have a strong resonance in terms of seasonality, with a stronger impact on prices at the beginning of the month. Classical VC Coin leaders, on the other hand, have a certain time lag with BTC’s seasonality factors.
From the perspective of 7-day rolling volatility of prices, the structure of UNI is consistent with that of SHIB, with two abnormal volatility peaks during this upward cycle.
The two abnormal volatility peaks of SHIB almost synchronize with BTC, while DOGE’s volatility peak has the same characteristics. This means that the hedging attribute of classical Meme Coin leaders against the decrease in BTC volatility is becoming weaker.
The results of the correlation matrix once again confirm the changing attributes of classical Meme Coin leaders. During this upward cycle, the correlation between SHIB and BTC is 0.53, while DOGE has an even higher correlation of 0.72.
Emerging White Horse Meme Coins PEPE, FLOKI vs. Emerging White Horse VC Coins TIA, RNDR, Mobile
In terms of seasonality, TIA has a stronger influence compared to PEPE and FLOKI, which is why there are market voices joking that modularity is the biggest meme in this cycle.
In terms of 7-day rolling volatility, TIA is also the undisputed leader, not the brightest star among the current Meme Coins as everyone expected.
In terms of correlation, it is also very interesting. During this upward cycle, the correlation between TIA and Mobile and BTC is almost 0, while the correlations between PEPE, FLOKI, and BTC are 0.61 and 0.46, respectively.
Just Listed Stars Meme Coins BOME, SLERF vs. Just Listed Stars VC Coins ENA, Aevo
Because they are new coins, we set the time interval from March 1st of this year to the present.
During this period, the seasonal factor of BTC has a weaker influence, with Aevo’s seasonal factor being mainly negative, and SLERF’s seasonal factor having a stronger influence.
Since April, both VC coins and Meme coins have seen a rapid decline in 7-day volatility for newly listed star coins.
In terms of correlation, it is still beyond expectations. Among them, BOME has a correlation of 0.61 with BTC, ranking first.
Further reading:
Meme coins rush ahead but the altcoin season is not coming, why do retail investors and institutions not pick up each other?
The secondary market price characteristics of VC coins and Meme coins are not so distinct. They do not have an antagonistic relationship of having one while lacking the other. Instead, they frequently exhibit mutual volatility in different life cycles at different time periods. Since April, the volatility of newly listed star VC coins has decreased and their correlation with BTC has weakened, making it difficult for secondary market traders to profit, which is the main reason for the market generating FUD sentiment towards VC coins.
But as rational investors, we need to understand clearly that the phenomenon of Meme coins > VC coins is only a cyclical phenomenon that has occurred in the past two months. We should not hastily conclude that there will only be Meme coins in the future, nor should we fill our investment portfolios with Meme coins. Overseas KOLs who market themselves based on this meme cycle are not trustworthy, and Western celebrities who issue coins during this meme cycle will definitely RUG. Please remember, we are here to invest, not gamble.
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