Welcome To The 'Memecoin Supercycle:' Crypto Money With Ivan

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I'm Ivan and welcome to Crypto Money. Some people want to build the "future of finance," but I just want to help you make money in crypto.
Each Sunday, you get weekly insights the news does not cover but you need to know about.
So you're not just entertained by crypto but know the story behind the story.

In this week's issue:

• What is the "memecoin supercycle?"
• Why does the memecoin supercycle exist?
• Should you participate in the memecoin supercycle?

The Memecoin Supercycle

If you visited Benzinga in any form last week, you may have heard about...

• Dogwifhat WIF/USD ripping 400% in a week.
• Some guy turning $2,700 into $3 million with MAGA Memecoin TRUMP/USD (it's more like $5 million at this point).
• Predictions that Dogecoin DOGE/USD and Shiba Inu SHIB/USD will "go crazy" in this bullrun. 

They have helped popularize the "memecoin supercycle" thesis in crypto circles.

It is based on a concept called unit bias — the tendency to prefer to own full units of something.

For example, owning a "full" Bitcoin feels better than owning "half," even though Bitcoin BTC/USD has no physical representation. But a full Bitcoin is also expensive.

What's not expensive?

Dogecoin at $1. Or Dogwifhat at $1.

Enter the memecoin supercycle:

Crypto venture capitalist Andrew Kang explains it in simple terms: "We are going to reach some serious levels of mental retardation for memecoins this cycle."

He sees memecoins as a "Skill-based Global Lottery Platform," where the skill lies in the ability to predict the winner — that is, the most valuable memecoin — and convince others of the same.

Kang cites the size of the traditional global lottery industry ($300 billion in sales in 2020) and sees memecoins outperforming "everything else by a wide margin."

According to him, the last memecoin run was "the test pump" and "the masses" (that is you, dear reader) won't care about technology or "innovation." A "new generation of new money memecoin elites" will be minted in this run, which, by the way, has just begun, says Kang.

Memecoin speculation is more accessible to all wallet sizes, which is why Kang predicts Dogecoin to "rip so much harder than Gamestop." 

His micdrop: "This is a multi month global momentum trade the froth of which you cannot possibly imagine."

DonAlt, a heavily-followed pseudonymous trader usually not known for memecoin predictions, puts it this way:

What's The Reason For The Memecoin Supercycle? 

Whether you believe in the memecoin supercycle or not, the math is mathing. 

As covered in the Benzinga Memecoin Mashup, the entire sector doubled its valuation in only a week and is now worth over $44 billion, per CoinMarketCap. 

If memecoins do this in the "very, very early innings" of Bitcoin's bull run, imagine what happens next...

But what is driving all of this?

A tweet by Autism Capital, a pseudonymous crypto-focused "citizen journalist" account provides insight:

That is simply another indicator for what Travis Kling, chief investment officer of Ikigai Asset Management, called his "financial nihilism" thesis.

In a nutshell, Kling says many investors have given up on crypto, the technology. But they have not given up on crypto, the speculative asset.

Quite the opposite, the "zeitgeist for young Americans" is "it’s not like the $500 is enough to make any difference anyways." 

Whether factually true or not, the Autism Capital tweet is evidence to what many perceive to be true — "the system" is rigged, so "bring on the s--tcoining."

Needless to say that Kling has a memecoin portfolio himself (as does Donald Trump, albeit involuntarily).

Like it or not, those theories seem to be playing out to a T thus far.

So, should you board the memecoin train?

Joining The Memecoin Supercycle: Yay Or Nay?

Just before the "face-melting" memecoin pump last week, this generated some debate on Crypto Twitter:

Several accounts chipped in with comments of achieving the contrary, the most popular being davis, another famous pseudonymous influencer.

He claims to have made seven figures from $0 in nine months during the last bull run and said, "If you can't spin a few hundred bucks to 6 figs then you don't want it bad enough."

The memecoin supercycle would seem like perfect opportunity to pull off such a feat.

And indeed, the example of "Bonk millionaire," a person that ran $16,000 to eight figures in the Bonk BONK/USD memecoin, is just one of many. 

However, the stories of "fallen heroes," those who do not survive the "skill-based global lottery," remain untold. Unless they tell us about it, like the very same person from the tweet above.

Another little-discussed fact: It is easy to throw $1,000 at memecoins if $1,000 is "chump change" for you. It is a different ball game altogether, if losing these $1,000 hurt or a possible 10X return would significantly change your finances. 

There is a very real possibility the memecoin supercycle is real and some people will make life-changing gains. 

But you should only consider participating if not winning this "skill-based lottery" does not matter to how your life is going.

Wrapping It Up

If you liked this column, give me a follow on Twitter, and I'll see you back for next week's Mad Crypto Money.

P.S.: Sign up to our "Future of Finance" newsletter. It's dope!

Image created using artificial intelligence with Midjourney.