The Memecoin Supercycle: Hype or Harbinger?

With BTC touching its
all-time high at $77k, many people are still waiting for Bitcoin to trigger
ALTCOINs. Interestingly, memes could very much be the new main actor in the
following cycle. Now let’s break it down – Why Memecoins and why at this point
in time? Surprisingly, these coins, which started as memes, are
gaining more community backing, increased transaction throughput, and even institutional adoption.

For example, Dogecoin started as a “fun experiment” but is now valued at multiple billions of dollars, and has personalities like Elon Musk acting as ambassador. The other cryptocurrencies that also come under the meme coins list, such as Shiba Inu
and Floki Inu, also contribute to this Supercycle theory. Yet, meme coins
continue to be the most speculative sector within the broader cryptocurrency
market.

As of Nov 2024, the Meme market cap is $75.9 Billion, about 2.7% of the entire $2.74
trillion crypto market cap. But how many of these meme coins have been
“profitable” for investors? The short answer: not many.

Data from August shows
that 64.7% of pump.fun traders on Solana either lose money or just break even.
Only 3% make over a thousand dollars in profit, and a tiny 0.0028% of wallets
reach the $1 million mark with meme coins.

Memecoins Performance: Source

The History of The Term ‘Memecoin Supercycle’

Murad Mahmudov is the author who first spoke about the memecoin supercycle, which has been undergoing its rising phase recently. Mahmudov believes that meme coins present an endless loop of abundance due to the decentralized communities created by the coins.

In conversation with Token2049 – a conference dedicated to the topics of
cryptocurrencies and blockchain – Mahmudov expanded on the theory, even giving
a lecture.

Despite the fact many traders have warmed up to Mahmudov’s memecoin supercycle theory, there are still some who are not fully convinced. For example, analyst Jameson Lopp referred to memes as “a terrible form of value Storage” due to their high
turnover time between pump and dump. Therefore, as a fact of consensus among
theoreticians, the memecoin supercycle will not occur or will not be of a
sustainable nature.

Lessons from the Past: A History of Memecoin Supercycles

Dogecoin: The OG Memecoin

The meme coins started off in 2013 with , a memecoin created by software engineers Billy Markus and Jackson Palmer as a joke. It was created to parody the wave of cryptocurrency mania towards Bitcoin.

Despite the fact that Dogecoin was
amusing, its value shot up almost 300% in 72 hours, and over 1 million people
visited Dogecoin.com within the first 30 days.

Second-Gen Memecoins: Faster, Funnier, and More Fierce

In 2015, the launch of Ethereum brought smart contracts and the ERC-20 token standard. Thus, this development allowed for the capacity to create custom tokens without having to design a blockchain from scratch. The strong presence of Ethereum as a smart contract platform means that new meme coins like Shiba Inu, Floki, SafeMoon, and Pepe have emerged, primarily on Ethereum.

Third-Gen Memecoins: The Next Frontier of Crypto

Due to the scalability issue faced by Ethereum, another set of smart contract platforms
like Solana, Avalanche, and Binance Smart Chain (BSC) came up. The communities
seeking to outcompete Ethereum on the tech front and socially saw these new
platforms as an opportunity. As a result, these third-generation blockchains
have been the new home for new meme coins that can function as a substitute for
social currency.

Memecoin Supercycle – Facts or Fiction?

While some experts believe that the hype surrounding meme coins has reached its peak, others argue that these digital assets are poised for further growth and adoption. 

Has the Meme Coin Craze Reached Its Limit?

With the crypto market gaining momentum, meme coins are becoming a hot topic of debate across social media platforms. Miles Deutscher claims that it is a warning sign.
Kaito's data show meme coins having mindshare at a new high at 27.32%.
Mindshare is expressed as a percentage of how much attention a topic receives
from the community.

Deutscher acknowledges that meme coins have potential for the future but says they’re at
a fork in the road. That’s why when it comes down to it, any hype around the
meme coins will either see them collapse or readjust. Furthermore, selling
altcoins now to make purchases of meme coins is not necessarily a very smart
decision, he adds. Instead, he advises that investors start taking this hype
train slowly.

Just like the correlation between Bitcoin and altcoins, CrediBULL Crypto gives a
not-very-common viewpoint. He specifically notes that large-cap coins are
stagnating while the small-cap meme coins experiencing a sharp rise are a
the symptom that the hype cycle is ending.

 A New Meme Coin Supercycle on the Horizon

Meme coins still enjoy optimistic opinions despite the pessimistic ones. According to Mahmudov, meme-oriented coins have been on fire for the past month.

Moreover, Google Trends data indicates that searches for
meme coins have been trending high, between 75 and 100 points for October. This
is a clear indication that new investors in the market are interested in meme
coins.

Investor Curb points
to a bubble growth model which sees meme coins at the beginning of this cycle.
As of writing this, the total market capitalization of meme coins reached $58.3
billion, which is a 2.8% growth over the past 24 hours on Coingecko.

Best Practices During Memecoin Supercycle

In addition to the
strategies mentioned above, it’s always helpful to have a concrete strategy
down your sleeve when the memecoin supercycle comes along. These are some tips
and best practices that you may consider.

Monitor social media platforms:

To understand which memes and tokens are gaining traction, it’s good to keep an
eye on X, Reddit, Discord, and Telegram. So, the sooner you realize a token is
heating up and buying, the sooner you can get on board the price momentum.

Secure Profits Early:

Many meme coins rapidly get attention, their price skyrockets, and then rapidly fall back
to earth. One of the things you need to ensure is that you lock your profits in
before peak. And if you’re in doubt, then sell a little bit too early rather
than too late.

Track Influencers:

Majorly, crypto influencers are always involved in bringing the attention of new Meme
coins and building hype for them. Fanning the flames like that can also elevate
prices, leading you to wonder which tokens influencers are endorsing could
signal which will be next to explode.

Diversify Across Several Coins:

You do your research, and still, there’s no guarantee that the meme coin you
buy will increase in price. Buying several different crypto meme coins diversifies
your crypto portfolio and is probably what you need if you get lucky enough to
pick a winner to make a profit.

Final Thoughts

Some may write off
the idea of a memecoin supercycle as speculative or overblown, but that
influence on the cryptocurrency market cannot be denied. Memecoins exist in a
community-driven marketspace fueled by viral hype and speculative trading –
both of which function at odds with the basic constructs underpinning the
traditional monetary market.

With meme coins latching onto the attention of even seasoned traders, these cryptocurrencies may continue to play a big role in how the crypto markets rally and play out – although not necessarily with the same intensity and intensity.

For beginner traders, meme coins have huge potential as their supercycles but also huge risks and
those risks exist during the supercycle. To navigate this highly volatile
market, you not only have to keep up to date on the latest market trends and
regulatory developments but also on how social sentiment can reverberate
through to price action.

So, if you are a participating meme coin trader or cautious observer, being adaptable and knowledgeable will be needed in order to
navigate the unpredictable but exciting world of meme coins.