Traders Discuss Why Memecoins Are the Biggest Narrative of 2024

Journalist and host Laura Shin interviewed cryptocurrency traders Ansem and Kel, known on x as blkoiz06 and Kelxyz, for her Unchained podcast. They discussed why memecoins had become the most profitable cryptocurrency trade this cycle and what the future might hold for the sector.

Is there value in a Memecoin?

To start, Shin asked traders if there was substance to meme-based tokens, as it has been a big argument against them. For Ansem, people “think too much” about the value of memecoins as projects. Furthermore, he believes that there is no real gain when comparing whether other altcoins deserve or have more value than meme-based tokens.

<blockquote class="twitter-tweet” data-width=”500″ data-dnt=”true”>

Why Memecoins has been the most profitable cryptocurrency trade of 2024: Ansem and Kelxyz

Immerse yourself in the wild world of memecoins with twitter.com/blknoiz06?ref_src=twsrc%5Etfw” rel=”nofollow”>@blknoiz06 and twitter.com/kelxyz_?ref_src=twsrc%5Etfw” rel=”nofollow”>@kelxyz_!

Find out how Ansem and Kel trade memecoins, the risks and rewards, and their predictions for the future of memecoins

Further,… pic.twitter.com/QovysNwAGP

—Laura Shin (@laurashin) twitter.com/laurashin/status/1787901262777684156?ref_src=twsrc%5Etfw” rel=”nofollow”>May 7, 2024

Ansem further explains that the crypto community is “very Internet-centric,” and its members are “Internet people” since the origin of cryptocurrencies. As a result, the community is financially aware but also knee-deep in online culture.

The trader believes that “memes and Internet culture have value.” People in the community are “funding” meme virality and realizing that it is a possibility with cryptocurrencies.

Shin jokingly added that if this trend had been popular in 2016, the creator of the Drake meme would already be a “bazmillionaire.” The host apparently referenced the still-popular meme that originated from Drake's Hotline Bling music video.

Kel agreed with this argument, stating that over the past 20 years, many trillion-dollar companies have capitalized on attention as their “winning business idea.”

All of these billion-dollar businesses (…) make it easy to direct attention and the way they have done it successfully has been, many times, through memes. One could even argue that memes are the central engine of the entire Internet.

The risks and criticisms of Memecoin Mania

To understand why memecoins have become the narrative of Q1 2024, 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 believe that many investors, especially new ones, find memecoins attractive because they have the potential to generate returns of 100 to 1,000 times.

Furthermore, losing money is not exclusive to memecoins. To illustrate his point, Ansem compared people who bought the top of Doge to those who bought bitcoin at $69,000 last cycle before it fell to $15,000.

For the trader, how much a token can drop and investors buying the top is part of the overall market dynamics rather than a characteristic of memecoins. However, he clarifies that there are better criticisms of the sector.

Ansem sees shady behavior behind project teams as a crucial issue to address. For him, a framework could prevent creators from controlling a large number of tokens and dumping them immediately after launch or upsetting investors.

In the responses to the podcast, a user twitter.com/jan_web3s/status/1788051400712163521″ target=”_blank” rel=”nofollow”>argument that the reason behind the recent frenzy is driven by “the financial nihilism and lack of liquidity that youth have.” Adding that investors “buying a simple currency is like a lottery ticket.”

It is worth mentioning that the trading of memecoins as lottery tickets is not an invisible phenomenon. On-chain research platform Lookonchain recently reported that a trader made 4,906x profits in one day by doing just that.

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This guy won a x4906 lottery ticket today, so lucky!

Exchange MEMEcoins as if you were buying a lottery ticket, investing 0.1/0.2/0.3 twitter.com/search?q=%24SOL&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$SOL for each twitter.com/hashtag/MEMEcoins?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#MEMEcoins.

Invested 0.2 twitter.com/search?q=%24SOL&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$SOL($30) in twitter.com/search?q=%24AGORA&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$NOW today, then I sold 2M twitter.com/search?q=%24AGORA&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$NOW for $100K, with 959K twitter.com/search?q=%24MILK&src=ctag&ref_src=twsrc%5Etfw” rel=”nofollow”>$ MILK(worth $47 thousand) remain.

So he turned 30 dollars… pic.twitter.com/fnJDQnavfI

— Lookonchain (@lookonchain) twitter.com/lookonchain/status/1787871647153942765?ref_src=twsrc%5Etfw” rel=”nofollow”>May 7, 2024

According to the report, the trader invests 0.1/0.2/0.3 SOL for each memecoin. Yesterday, the investor turned $30 into $147,000 by converting 0.2 SOL into 2 million AGORA.

What's in the future of Memecoins?

When asked what lies ahead for the sector, both traders agreed that memecoins are not going away. For Ansem, the community's behavior towards memecoins is like that of the last nft cycle. With nfts, investors felt part of a community and were working to develop it.

The shared experience of relating is another crucial factor in the meme-based token craze, as seen in token communities like Dogwifhat (WIF).

Adding to that idea, Kel stated that “all memes will become currencies” in the next ten years. Furthermore, the marketer would not be surprised if by then “the creation of a meme was natively financialized”, as the trend towards the financialization of things continues to increase.

Ultimately, he believes the sector is in the early stages of this trend as the community attempts to “capture the meme moment” and capitalize on it now that cryptocurrencies have made financialization “trivial from a technological perspective.”

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