Winning Users, Winning the World: Even Binance Cannot Ignore the Rise of Meme Coins. How Did This Meme Mania Come About, and What Forms This Super Cycle? This article is derived from a report by Binance, interpreted and compiled by Deep Tide.
(Previous Background: Vatican’s “Mascot Luce” Sparks Religious Meme Coin Frenzy, Reaching a Market Cap of Over $60 Million)
(Background Supplement: NFT Collector Pranksy Lashes Out: “Waking up to Meme Coins Pisses Me Off! Meme is All Crap”)
Contents of This Article:
Key Points
Macro Data of Meme
Global Economic Background in Which Meme Exists: Large-Scale Monetary Easing and Financial Nihilism Among the Youth
Value Proposition of Meme Coins: Lacking Practicality but Attractive
Risk Considerations
Outlook: Tokenized Software Business VS Tokenized Ideas
Winning Users, Winning the World.
Even Binance, as strong as it is, cannot ignore the rise of meme coins.
Creating a meme craze, how did this super cycle come about?
Recently, Binance Research released a report titled “Understanding the Rise of Meme Coins,” which provides a comprehensive analysis of the meme phenomenon, the macroeconomic factors behind it, its value proposition, and its potential impact on the cryptocurrency industry.
Deep Tide TechFlow has edited and interpreted the report to help everyone quickly grasp its key points.
Global Background: Expansion of Global Money Supply and Investment Behavior
Against the backdrop of a rapid expansion of the global money supply, high-risk investments have become more attractive. This phenomenon can be broken down into the following levels:
Most funds flow into traditional assets like the S&P 500 and real estate. Some funds flow into major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
At the far end of the risk spectrum, meme coins emerge as high-risk, high-reward investment tools, attracting some excess capital.
Small Environment: Retail Investors Seeking New Paths to Wealth Growth
Many retail investors are exploring new channels of wealth creation, reflecting their changing perceptions of traditional finance.
Meme coins attempt to embody these principles by reducing internal advantages and increasing equal accessibility for global investors.
Trend: Financialization of Internet Culture
Since the early days of the internet, memes have exhibited viral spread and community-driven appeal. This phenomenon has now extended to the financial sector through cryptocurrency technology, achieving the financialization of memes.
Implications: Taking the Essence
Key features like fair issuance and low circulation volume tokenomics, successfully demonstrated by well-known meme coins, are worth considering for any project planning future token issuance.
What does Meme embody? Another side of the industry that has always existed: focusing more on financial profits rather than technological advancement.
Since 2022, the total market cap share of meme coins (excluding BTC, ETH, and stablecoins) has increased from 4% to 11% in 2024.
This proportion remains below the peak in 2021 when the market caps of $DOGE and $SHIB reached $80 billion and $39 billion, respectively.
From 2022 to 2024, the market cap share of meme coins has almost tripled.
Fiat Money Printing, Global Money Supply Increase
During the 2020 COVID crisis, global central banks increased the supply of fiat currency at an unprecedented rate.
Figure 2 shows that from 2020 to 2022, the total global money supply increased from $81 trillion to $102 trillion, an increase of over 25%.
Inflation and Commodity Price Increases
The U.S. inflation rate reached 7% in 2021 and 6.5% in 2022.
Faced with currency devaluation, rational actors invest funds into assets deemed to have long-term value.
Wage growth cannot keep up with the speed of house price increases. Figure 4 shows that the average number of years of wages needed to purchase an average-priced house increased from 4.4 years in 1963 to 8.1 years in 2021, nearly doubling.
Attitudes of the Younger Generation: Financial Nihilism
The macroeconomic situation puts pressure on the younger generation. Young people are losing confidence in the traditional financial system, especially evident in the cryptocurrency market.
94% of cryptocurrency buyers are Millennials and Generation Z, aged 18-40.
Key Event: The 2021 GameStop Short Squeeze event reflected young investors’ questioning of traditional financial structures.
Definition of Meme Coin Nihilism: Based on internet culture, memes, or popular trends; usually lacking clear practicality or intrinsic value.
Since 2020, the number of meme coins has surged. 75% of meme coins were established within the past year.
Alternative Appeal: Represents a newer, fairer, and more accessible opportunity for wealth creation.
No pre-mining, team allocation, or venture capital allocation.
All tokens are equally available to all participants at issuance.
Usually has a simple, easy-to-understand narrative, making it easier for ordinary investors to understand and participate.
Largely driven by investor sentiment and herd mentality.
Surviving Against All Odds, Manipulation Persists
97% of meme coins have failed. Only a few meme coin projects can survive long-term and maintain relevance.
Conspiracy groups and rug pulls are everywhere, and you might just be the “exit liquidity.”
Low liquidity can lead to extreme price volatility and difficulty exiting investments.
Market Saturation and Innovation Stagnation
New projects may struggle to gain attention and investment, or attention is limited.
The meme coin market may already be saturated. Its prevalence may divert attention and resources away from genuinely innovative projects, impacting the long-term development and innovation of the cryptocurrency industry.
Altcoins VS Meme Coins
We can describe technology-driven altcoins as tokenized on-chain software businesses, while meme coins can be described as tokenized ideas and narratives.
In the long run, the most successful altcoins need to create and maintain useful, sufficiently differentiated software products with real market fit.
The most successful meme coins may need to create and maintain differentiated, unique narratives and ideas.
Winning Users, Winning the World
Meme coins demonstrate significant retail demand for fairly issued tokens that are open to all blockchain participants from the start.
Brand and networking resources provided by mature venture capital institutions (obtained through private token sales) may be attractive to new projects, but ultimately, the user base of any product will consist of retail participants.
Allowing retail participants to invest from the project’s early stages and grow with the team is crucial for cultivating a strong, loyal community around any crypto asset.
Globalization of Price Discovery Mechanism
The rise of meme coins shows that tokens issued in this way can reach market caps in the millions, if not billions, driven by the borderless, permissionless nature of decentralized markets through organic price discovery mechanisms.
The rise of meme coins is an exciting new trend that powerfully demonstrates the ability of blockchain technology to unite individuals globally and cultivate organic communities around tokenized assets, seemingly stronger than ever before.
Related Reports?
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