Meme Coins Like Buying Lottery Tickets? Co-founder of Mechanism Capital, Andrew Kang, Expresses a Different View
Since the explosion of the meme coin BOME (BOOK OF MEME) on the public chain Solana last week, it has once again sparked a craze for meme coins. Numerous fundraising projects have emerged like mushrooms after the rain, and in the past two days, it has spread from the Solana chain to other public chains. For most people, this “meme rush” is like buying lottery tickets and relying on luck. However, Andrew Kang, co-founder of Mechanism Capital, disagrees.
Andrew Kang: Meme coins are investments
Andrew Kang conducted an in-depth analysis of the market potential and investment mentality of meme coins. He pointed out that meme coins are often compared to casinos or lotteries, but their market scale may actually be more than 100 times that of the latter. As an asset, people tend to view meme coins as investments rather than just casino-style entertainment.
He proposed that on average globally, the proportion of personal wealth invested in casinos is usually less than 2%, and few people put all their assets into it. In contrast, investors have a more diverse allocation ratio for meme coins. Cautious investors may allocate 1-5%, “degen” players who can tolerate risks may invest 10-50%, and those who invest according to the Kelly optimal strategy may even exceed 100%.
Regarding the development trend of the meme coin market, Andrew Kang refuted the view that it is a zero-sum game. He believes that the meme coin market will continue to achieve higher highs and higher lows in future cycles. The overall market value of meme coins is expected to grow in the next decade.
Top three meme coins have a market value exceeding 40 billion
By observing the data from Coingecko, the current top three meme coins are $DOGE, $SHIB, and $PEPE, with a total market value of approximately 41.8 billion and a 24-hour trading volume of up to 6 billion. On the other hand, although the recently popular meme coin BOME has experienced a slight price correction, its market value has reached 1 billion US dollars.
From Andrew Kang’s analysis and market data, it can be seen that meme coins are indeed different from traditional lottery concepts and are a new type of investment asset. It is not just a short-term entertainment consumption but a market with long-term appreciation potential, providing investors with a “high-risk, high-return” investment opportunity.
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