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The crypto community has been buzzing about a potential "memecoin supercycle" that could lead the next bull charge. The interesting thing is that less than a week ago, it wasn't even a concept.
It started gaining momentum after crypto analyst Murad Mahmudov gave an extremely compelling speech at Token2049: he said that memecoins might outperform the traditional crypto assets in the coming years.
So, what exactly is this memecoin supercycle, and why is it now a thing?
What Exactly is a Memecoin Supercycle?
Murad Mahmudov defines the memecoin supercycle as a period when tokens based on memes experience unprecedented growth and performance. During a supercycle, memecoins will outperform other established tokens, somewhat similar to the alt season but for memecoins.
What this means is that memecoins could find their way through criticisms and become leading players in the crypto market. Some defining aspects of the memecoin supercycle include:
- Community-Driven Value: Mahmudov emphasizes that strong communities, which he calls "cults," are behind the most powerful memecoins.
- Outperformance of Traditional Assets: In 2024, 16 of the top 20 tokens in the top 300 outperforming Bitcoin were memecoins.
- Shift in Investor Focus: The supercycle theory has shown a shift in investor focus back to community-centric memecoins from utility-focused tokens.
What Will Trigger a Memecoin Supercycle?
With that said, let's take a look at some of the possible driving forces behind a probable memecoin supercycle in 2024 and beyond:
- Macro-Economic Conditions: Most apex banks around the world have lowered interest rates since the beginning of 2024 to keep liquidity high, and several more are likely to follow suit over the coming 12 months. This may be extremely favorable for people to invest in high-risk assets like memecoins.
- Financial Nihilism: Thanks to the YOLO (you only live once) lifestyle, many people are now embracing an I-don't-care attitude toward investments. Thus, they are likely to be attracted to speculative assets like memecoins.
- Cultural Shift: There is a reported movement away from traditional forms of community and toward finding meaning in online, financialized communities.
- Product-Market Fit: Memecoins have demonstrated clear product-market fit, combining elements of ICOs (capital formation) and NFTs (community building) to create a unique value proposition.
- Retail-Friendly Nature: Memecoins are widely available and more appealing to retail investors than more complex crypto projects.
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Can We Predict the Next Memecoin Supercycle?
Prediction of the next supercycle for memecoin is difficult. Despite the fact that some analysts in the crypto community showed a couple of trend indicators for memecoin, we keep an eye on:
- Market Sentiment: According to Santiment, memecoin mentions on social media surged 43% in Q3 2024 versus Q2, an indication of early interest possibly translating into market action.
- New Memecoin Launches: Over 2.3 million new memecoins have been created since January 2024, when Pump.fun launched. New memecoin creation accelerated 300% during Q1 2024 compared to Q4 2023.
- Exchange Listings: Major exchanges, including Binance and Coinbase, listed 50% more memecoins in 2024 than in 2023. Furthermore, after the new listing in 2024, memecoin's trading volume increased 200% on these exchanges.
While these metrics are telling, the memecoin market remains exceedingly volatile and unpredictable. Mahmudov himself cautions that "99% of people in the memecoin industry are scammers" and recommends that market participants find projects with organic, decentralized communities.
Which Memecoins Will Benefit from a Supercycle?
As Mahmudov mentioned, memecoins with a cult-like following would benefit during supercycles. Some of the top tokens in the memecoin market that fit this description include:
- Dogecoin (DOGE): The original memecoin, DOGE, has maintained its popularity since 2013. Its large community and occasional endorsements from figures like Elon Musk contribute to its staying power. In 2024, DOGE saw a 21% increase year-to-date, demonstrating its continued relevance.
- Shiba Inu (SHIB): Often referred to as the "Dogecoin killer," SHIB has built a strong community since its 2020 launch. It's expanding beyond memes with developments like the Shibarium layer-2 solution, potentially positioning it for growth in a supercycle.
- Pepe (PEPE): Launched in 2023, PEPE quickly gained traction due to its association with the popular Pepe the Frog meme. It experienced explosive growth in early 2024, with some analysts predicting further potential.
- Dogwifhat (WIF): A newcomer that saw significant gains in early 2024, WIF became the third-largest memecoin with a $4.3 billion market cap by March. Its listing on Binance catalyzed rapid appreciation, with its price soaring over 2,700% in Q1 2024.
- Bonk (BONK): Emerging as a noteworthy token in 2024, BONK has gained attention for its vibrant community and unique approach. Its growing market cap and active social presence have positioned it among the top memecoins to watch.
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Conclusion
While the memecoin supercycle trend has captured significant attention and investment, it's crucial for investors to approach this space with caution. The high-risk, high-reward nature of memecoins means that while there's potential for substantial gains, there's also a significant risk of losses.
