The Memecoin Supercycle Thesis

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Memecoins have emerged as a notable component of the cryptocurrency landscape, capturing attention from investors, enthusiasts, and curious onlookers alike. These digital assets, often inspired by internet memes and pop culture phenomena, have transitioned from niche novelty items to significant players within the broader market. The rise of memecoins can be attributed to various cultural and social dynamics that resonate with audiences in the digital age.

One of the driving factors behind the success of memecoins is their inherent connection to community engagement. Unlike traditional cryptocurrencies, which often focus on technical innovations and complex functionalities, memecoins thrive on the strength of social networks and communal interests. Platforms such as Twitter and Reddit have become havens for memecoin communities, where memes, jokes, and shared experiences fuel enthusiasm. This level of grassroots involvement not only boosts visibility but also fosters a sense of belonging among participants, ultimately enhancing the appeal of these cryptocurrencies.

As we delve deeper into the memecoin cult thesis articulated by Murad Mahmudov, it becomes clear that understanding this unique phenomenon necessitates an exploration of these social and cultural factors that have shaped the rise of memecoins in 2024.

Memecoins: The Outperformance of 2024

The year 2024 has marked a remarkable period for memecoins, as evidenced by performance statistics that indicate a significant presence in the cryptocurrency market. Notably, 13 out of the top 20 outperforming tokens are classified as memecoins, demonstrating their growing influence and popularity among investors. This phenomenon prompts a closer examination of specific examples that highlight their success and the dynamics driving this trend.

The success of these memecoins can be juxtaposed with traditional cryptocurrencies such as Bitcoin and Ethereum, which, while still valuable, have exhibited more stable, slower growth rates. In contrast, the volatility associated with memecoins presents a higher risk-reward scenario that attracts speculative trading. Memecoins play the perfect roll to optimize gains when implemented with the barbell investment strategy. Someone could allocate 90% to ETH/SOL, which are large, safe crypto assets with slow growth, and then allocate 10% to ultra-high risk cult memecoins. When the crypto market starts to heat up, the memecoin portion could significantly outperform ETH/SOL.

The Shift to Cult Memes

The landscape of memecoins has witnessed a significant transformation as new memes emerge and consistently outperform their older counterparts in the cryptocurrency market. This shift can be largely attributed to changing community sentiments, which dictate not only the popularity of memes, but also the value associated with them. The influence of these collective sentiments is profound, as it allows new entries to capitalize on engagement levels that reflect current trends and interests.

In the realm of cryptocurrency, the transition from older memes to newer variations illustrates the evolving nature of humor and cultural references. Traditional memecoins, such as Dogecoin, thrived due to their novelty and the communities that rallied around them. However, as the market expands and diversifies, newer memes are capturing the interest of the audience through innovative and relatable content. This trend suggests a diminishing efficacy of established memetic icons in comparison to fresh, dynamic narratives that resonate more deeply with contemporary investors.

The Key Components to a Good Cult Meme:

1. All coins must be circulating with a wide distribution (no large holders of the supply).
2. The coin has been around for at least 6–12 months.
3. The coin has experienced 3-4 large 70% price drops and still has a strong dedicated community.
4. Passionate community members are willing to work for free for the "cult".
5. Emergence of a "financialized" new religion or strong digital brand (SPX6900/GIGA).

The list of coins Murad has identified: Coingecko Murad Memecoins

Follow Murad's $30M onchain memecoin portfolio.

Make sure to check out How to DCA (dollar cost average) to reduce your risk when buying memecoins.

The Memecoin Supercycle