Crypto Traders Discuss Why Memecoins Have Been 2024s Most Profitable Narrative
Journalist and host Laura Shin interviewed crypto traders Ansem and Kel, known on X as blkoiz06 and Kelxyz, for her Unchained Podcast. They discussed why memecoins had become the most profitable crypto trade this cycle and what the future might hold for the sector.
Is There Value In A Memecoin?
To begin with, Shin asked the traders whether there was substance in tokens based on memes, as it has been a big argument against them. To Ansem, people think too hard about the value of memecoins as projects. Moreover, he considers theres no real gain in comparing whether other altcoins deserve or have more value than meme-based tokens.
Why Memecoins Have Been 2024s Most Profitable Crypto Trade: Ansem and Kelxyz
Dive into the wild world of memecoins with @blknoiz06 and @kelxyz_!
Discover how Ansem and Kel trade memecoins, the risks and rewards, and their predictions for the future of memecoins
Plus, pic.twitter.com/QovysNwAGP
Laura Shin (@laurashin) May 7, 2024
Ansem further explains that the crypto community is very internet-centered, with its members being internet people since cryptos origin. As a result, the community is knowledgeable about the financial aspect but is also knees-deep in online culture.
The trader believes theres value in memes and culture on the internet. People in the community are financializing meme virality and realizing that its a possibility with crypto.
Shin jokingly added that if this trend had been popular in 2016, the Drake meme creator would be a bazillionaire by now. The host seemingly referenced the still-popular meme that originated from Drakes Hotline Bling music video.
Agreeing with this argument, Kel asserted that, over the last 20 years, many trillion-dollar businesses have capitalized attention as their winning trade businesses idea.
All these trillion-dollar businesses () facilitate directing attention and the way theyve done that successfully has been, oftentimes, via memes. One could even make the argument that memes are the core engine of the entire Internet.
The Risks And Criticisms Of Memecoin Mania
To understand why memecoins have become the narrative of Q1 2024, the traders discussed the risks and arguments against the tokens.
One of the biggest criticisms of memecoins is their high-risk nature. Because they are much smaller and not backed by institutional money, they can be riskier and more easily go to 0.
Despite this, traders consider that many investors, especially new ones, find memecoins attractive because they have the potential to give 100x to 1000x returns.
Moreover, losing money is not exclusive to memecoins. To illustrate his point, Ansem compared the people who bought Doges top to those who bought Bitcoin at $69,000 last cycle before it fell to $15,000.
To the trader, how much a token can drop and investors buying the top is part of the general market dynamics instead of a characteristic of memecoins. However, he clarifies that there is better criticism of the sector.
Ansem considers the shady behavior behind the projects teams a crucial issue to address. To him, a framework could prevent creators from controlling a large supply of the tokens and dumping them immediately after launch or rug-pulling investors.
In the replies to the podcast, a user argued that the reason behind the recent frenzy is driven by the Financial nihilism and the lack of liquidity that the youth has. Adding that investors are Buying a mere coin is like a lottery ticket.
It is worth mentioning that trading memecoins like lottery tickets is not an unseen phenomenon. On-chain research platform Lookonchain recently reported a trader seeing 4,906x gains in one day by precisely doing that.
This guy won a 4,906x lottery ticket today, so lucky!
He trades MEMEcoins like buying a lottery ticket, investing 0.1/0.2/0.3 $SOL for each #MEMEcoins.
He invested 0.2 $SOL($30) in $AGORA today, then sold 2M $AGORA for $100K, with 959K $MILK(worth $47K) left.
So he turned $30 pic.twitter.com/fnJDQnavfI
Lookonchain (@lookonchain) May 7, 2024
Per the report, the trader invests 0.1/0.2/0.3 SOL for each memecoin. Yesterday, the investor turned $30 into $147,000 by turning 0.2 SOL into 2 million AGORA.
Whats In Memecoins Future?When asked what is in store for the sector, both traders concurred that memecoins are not going away. To Ansem, the community behavior towards memecoins is like that of NFTs last cycle. With NFTs, investors felt like they were part of a community and were working towards developing it.
The shared experience of relating is another crucial factor in the craze of meme-based tokens, as seen in communities of tokens like Dogwifhat (WIF).
Adding to that idea, Kel asserted that all memes will become coins in the next ten years. Moreover, the trader wouldnt be surprised if the creation of a meme was natively financialized by then, as the trend of financialization of things continues to increase.
Ultimately, he believes the sector is in the early stages of this trend as the community tries to capture the moment of a meme and capitalize on it now that crypto has made financialization trivial from a tech perspective.
Text source: NewsBTC
