Pseudonymous crypto researcher CryptoKoryo, in his latest YouTube video, offered valuable insights and strategies for traders looking to trade meme coins.
What Happened: The researcher highlights the potential of meme coins with stories of individuals turning $1,000 into a million dollars within a month. However, the reality is often different with many traders buying a meme coin thinking they are early but they land up at zero.
He cited the real example of someone who bought $600 worth of Pepe on the first day it was tradable, sold the same day for a $60 profit, but could have made $9 million if they had held on.
He recommends having a combination of two approaches for playing the game well:
- Meme coins tend to perform best during specific periods, such as Q1 2024 and Q2 2023.
- Studying parabolic moves and adoption waves, as meme coins often experience explosive growth followed by steep corrections.
He breaks down the adoption waves of meme coins into three distinct phases:
- Wave one: Riskiest but offers the highest potential rewards, early buyers positioned to make substantial gains. (Examples: Popcat, Grok, BOME)
- Wave two: More challenging, as traders must determine whether a meme coin will continue its upward trajectory or fade away. (Examples: Dogwifhat (CRYPTO: WIF), Pepe PEPE/USD, Bonk BONK/USD)
- Wave three: Least risky, as the meme coin is already established. Potential returns are lower compared to earlier waves. (Examples: Dogecoin (CRYPTO: DOGE), Shiba Inu SHIB/USD)
He cautions investors/traders of influencers and "shillers" who may have their agendas, but not to ignore them entirely, as they can provide valuable information.
Also Read: DOGE Is The ‘BTC Of Memes’ And These Two Meme Coins Are The ETH And A ‘Must Have,’ Trader Touts
Why It Matters: CryptoKoryo notes that trading meme coins requires discipline, patience and a long-term perspective. "Don’t try to become rich overnight," he advises. "Try to focus on longevity as a trader and just becoming a bit better every time with every coin trade."
In his meme coin narrative X post, the expert highlighted that the number of meme coins is too high and rising at a rapid pace, increasing supply, unlike in 2021 when demand exceeded supply.
He notes two strategies: a fully on-chain approach wherein risk/reward is great but the win rate is low. Alternatively, waiting for a narrative to take over Crypto Twitter, thus increasing the win rate but giving up some of the risk/reward ratio.
Kroyo opts for a combination of both approaches, as few of the thousand meme coins will be profitable. Compared to meme coins in 2021, Koryo thinks “It’s more like high-risk low-reward for most."
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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