Of the top 20 cryptocurrency assets this year, 14 are Memecoin projects, which is hard to ignore.

In this article, I will explore in depth how to identify potential Memecoin and explain why I think the field will continue to be strong as the end of the year approaches and 2025 approaches.

Change the perception of the Memecoin

Looking back at the last market cycle, I can hardly stand Memecoin. In my opinion, projects such as Dogecoin (DOGE) and Shiba Inu coin (SHIB) seem to mock the —— of this industry, which is undoubtedly unacceptable for "purists" like me. After all, I've been focusing on on-chain data and fundamental analysis ever since I entered the cryptocurrency industry. I think the industry is largely misunderstood, and so I work to eliminate noise. How can this be achieved? My approach is simple: rely on data, analyze problems in an easy-to-understand framework, and focus on business models and cash flow, while being absolutely honest.

Invest in the "cult" Memecoin

Recently, I began to have a clearer understanding of the fundamental analysis of cryptocurrency assets and networks. The opportunity for this shift is when someone asked me what I think of Solana at the end of December 2022. At the time, I couldn't give a clear answer from a fundamental point of view, because there were no fundamentals at Solana. But I've done a lot of research before investing.

"I just think the community atmosphere of Solana is similar to the Ethereum in December 2018 (when ETH fell to $80). Through the data analysis, I found that the key performance indicators also showed a similar trend. At the same time, I can feel the power of the community, and after studying the core contributors, the founding team, the investors, I found that although these people have made money, they seem to want to stay and stick to the end. So, my intuition tells me that it will make a comeback.」 That's my answer.

But in fact, what I was doing was identifying a "cult," but I hadn't fully defined that at the time until I watched Murad Mahmudov speak at the Token 2049 conference.

When he compared Memecoin to a "cult", I suddenly became enlightened. Why is it so? Because my successful investments in cryptocurrencies have almost always come down to "cult investments." Bitcoin, Ethereum, Solana, and Chainlink, all can be regarded as a "cult", arguably the most powerful cryptocurrency network (and assets) with almost "cult" characteristics.

Even Apple, Tesla, and Barstool Sports have "cult" qualities. As investors, we actually need to identify these "cults".

Because the best brands all have "cult followers," so do cryptocurrency networks, but they tend to call themselves "communities" rather than "cults." This reminds me of one of my strong reasons for my bet on bitcoin in early 2020: I watched an interview with Paul Tudor Jones (legendary macro trader). In an interview, Stanley Druckenmiller (founder of Duquesne Capital) told him: " The price of bitcoin once fell from $20,000 to $3,000, but 80% of bitcoin holders persisted.」

That's cult behavior, what we're looking for in cryptocurrency networks / investable assets, and it's an important part of fundamental analysis. If you're a value investor, my point sounds a little irrelevant. But in my opinion, this is a cold fact.

Memecoin Why you perform well

1.  Retail investors fight back: Retail investors are tired of playing a manipulated casino game with venture capital firms (VC) —— Venture capital firms are used to selling tokens to retail investors at a valuation of $8 billion to $10 billion in Series B funding. Having said that, I don't think it is entirely due to venture capital firms, and the lack of regulation and poor legal precedent / guidance have also helped. However, VC cannot use high valuation airdrops to build a "cult" community of users and communicators. So retail investors have created their own casinos and set their own rules of the game.

2.  Tokens potential: Currently, the coin is valued at about $900 billion, and $155 billion of tokens are expected to be unlocked in the next five years. By comparison, Memecoin has a market cap of about $45 billion, with emerging Memecoin having a market cap of about $10 billion. But Memecoin has no unlock period, retail investors can participate early in the project, and investors have seen DOGE reach $95 billion last cycle and SHIB over $40 billion. Note: I am using data science to identify "conspiracy coins (Cabal Coin)" to distinguish between fairly issued tokens and scams or tokens more vulnerable to "insider" manipulation."

3.  The need for social and belonging: People spend more and more time online. They feel lonely, worried about their financial prospects, and seek a sense of belonging.Memecoin Just when all of the conditions are met. If you're a baby boomer, it's important to understand the impact of the younger generation on the market, because they are gradually becoming the main force of the market.

4.  The rise of the online gambling industry: The industry has experienced significant growth over the past three years and has now become an $85 billion industry with an annual growth rate of 11. [] 7%. Sports betting accounts for about half of the industry, and mobile betting is also growing faster than offline betting.Memecoin It is this trend that has a greater chance of success.

5.  A shift in market perception: The market is gradually realizing that fake coins and Memecoin are actually selling the same thing —— a casino ticket. In a way, it's not technology, it's always been related to speculation (nothing wrong with that, so is Wall Street). And Memecoin seems to be a better investment vehicle for retail investors.

SPX6900

This token has the potential to be among the top 25 assets in cryptocurrencies by market capitalization.

SPX6900 Has a huge "addressable interest". Just as Dogecoin did well, at first because many people like dogs. This is a global market, and it is very interesting to make Memes with them.SPX6900 Also has a strong global appeal, with its slogan: "disrupt the stock market (Flip the stock market)" and "Stop trading, believe in something".

It's reminiscent of Gamestop, but with much more potential. Since the beginning of September, the number of SPX token holders has increased by 20 times. The project's Twitter account has added 2. 50,000 followers in the past month, with each tweet filled with "cult-like" comments.

SPX also has a "cult leader" Murad, who owns 2% of the supply and vows not to sell it for a year (you don't have to believe him completely, but his wallet has been revealed by the community, making it difficult for him to break his oath).

In addition, a number of cryptocurrency Whale posted large buy orders on Twitter and also vowed not to sell for a year. That doesn't mean we should trust them. But that's cult behavior that reminds of the early stages of Bitcoin.

GIGA

Like SPX6900, GIGA is also based on the dog / cat iteration, and has a very wide range of "addressable interests".「Gigachad It has been an Internet hit for many years. It originated from Reddit and 4chan and is popular for its blend of satire, humor, exaggerated ideals, lifestyle / fitness, exaggeration and satire. We know that it already has a broad appeal.

The token also has growing Twitter accounts, strong on-chain signals, cult-like communities, and interesting Memes. It is also a token that Murad has been promoting (and holding heavily) on.

POPCAT

This is simple, it is benefiting from the dog-to-cat transition. While this may sound funny, the data do show the trend. Investment in POPCAT is a hedging strategy for the investment in BONK.

In addition, POPCAT has a very strong community and a strong chain base, and has a strong momentum, so it is expected to be the winning "cat coin".

risk factor

When dealing with Memecoin, never forget that you are under the shadow of a "tail risk." Again, be sure to do your own research.(Techub News Note, tail risk refers to the significant risk that may occur in an extreme market environment. The probability of such an event is very small, but once it occurs, it may bring huge losses.）

Key risks to focus on when investing in an Memecoin (in no particular order)

Regulatory risks: If the cryptocurrency industry is well regulated, it could mean that copycoins (Altcoins) can have more room for innovation in the design of the token economy, yielding rewards for holders. This could affect the market's perception of value and push investors to copycat assets. However, I think it will take some time to work, and it is not a huge risk at the moment.

Liquidity risk: If Memecoin don't have enough liquidity, then market value is meaningless for them.

Market sentiment / macro shift: Memecoin Relying on market sentiment and liquidity operation. Therefore, inflation, geopolitical tensions and other changes will affect cryptocurrencies (and Memecoin) first.

Attention shift: The success of Memecoin largely depends on public attention. Know that what's popular today may soon be replaced by new narratives, especially those that have already grown dramatically (insiders will profit and turn to new opportunities).

Consensus: Memes is becoming a consensus bet for cryptocurrency natives, requiring a constant influx of new users to keep it alive.

Conclusion and final ideas

1.  Things that do well early in the cryptocurrency cycle tend to do well late in the cycle. This may be the Memecoin of this cycle.

2.  Assets that struggle to value tend to rise beyond imagination. The reason is that once the valuation can be made through discounted cash flow (DCF), the price ceiling of the asset is set. And assets that cannot be valued may contain greater potential for growth.

3.  DOGE once had a market cap of $95 billion, providing the opportunity for a new Memecoin that proved that the popular Memecoin can shine in the market.

4.  Financial nihilism is real, and Memecoin is a vivid interpretation of this nihilism. They represent a bet on uncertainty in financial markets and a way for investors to seek novelty and excitement.

5. Treat Memecoin rationally. If you have a strong interest or concern about Memecoin, be sure to learn into them, rather than being influenced by emotions.

6.  I strategically chose the memecoins to trade on the Solana. Because, in my opinion, the Memecoin ecosystem on Solana is the most prosperous.

7. Is Memecoin any practical?Memecoin Provide a "C to C" service, or customer to customer. They represent values such as entertainment, the community, and reducing loneliness (though this sounds sad). To some extent, Memecoin's income is not achieved in the traditional way, but through the capital appreciation of tokens.

8.  Memecoin Is more suitable as a short-term trading tool than a multi-cycle investor. Investors should be clear about this and develop investment strategies accordingly

9.  If there is a market boom like the copycat season, 25 (maybe as many as 50) Memecoin could be in the top 100 crypto assets. At present, this number is only 10, and there is still a lot of room for growth in the future.

10.  In my personal experience, I've talked to several serious people (institutional investors in the cryptocurrency space) about Memecoin. I think we are still in the early stages and the trend of Memecoin is likely to continue.

11.  Finally, stress that never invest more than you can afford. If you invest in Memecoin and it keeps you awake at night, you've lost. So, please be sure to prevent this situation from happening.