- Memecoins are entering a so-called “supercycle phase,” according to a Token2049 talk titled “The Memecoin Supercycle.”
- The author argues that failed crypto projects, despite their shortcomings, contribute valuable lessons and knowledge that drive the industry forward.
- The article questions the broader significance of a potential memecoin supercycle, stating that crypto’s purpose extends beyond merely making people rich.
Memecoins like Dogecoin and Shiba Inu have seen a surge of interest lately. Some are calling it a “supercycle”, but what’s driving this trend and what does it mean for crypto? Let’s take a closer look.
The Memecoin Market
Memecoins now account for $53 billion or about 2.3% of the total crypto market cap. Pumpfun, launched in January 2024, saw about 23 million new memecoins created since then. However, memecoin trading remains very speculative. According to August 2024 data, 64.7% of Pumpfun traders on Solana lose money or break even at best. Only 0.3% make over $1,000 in profit.
The Memecoin Investment Thesis
Some argue memecoins represent an alternative to VC-backed altcoins with questionable value. There’s some truth here as many hyped crypto projects have failed to deliver. However, failed projects also provide important lessons for the industry on what works and what doesn’t. Memecoins do not aim to create innovative products or advance the technology.
The Supercycle Meaning
If memecoins enter a supercycle, it raises questions about the purpose and value provided to society and regulators. Crypto was created to expand financial access and freedom, not just enable more gambling. While memecoins may see a temporary surge, it’s doubtful they will drive lasting innovation for blockchain technology.
Conclusion
In the end, memecoins seem more likely to be a speculative frenzy versus a revolutionary tech breakthrough. The crypto industry is better served by focusing energy on creating real utility that improves people’s lives. Gambling on memecoins may pay off short-term for some, but it’s unlikely to be what propels crypto to the next level.
