According to Mechanism Capital co-founder Andrew Kang, memecoins that are able to take advantage of this cycle’s deeper “culture” have the potential to be significantly more profitable than typical meme tokens that are based on animals or straightforward jokes.
Kang stated in a post on April 7 on X that a new class of “culture coins”—memes focused on cultural values like politics, brands, religion, and lifestyle—have the potential to be significantly more “viral” than the well-known memecoins from the previous cycle, such Dogecoin or Shiba Inu coins.
Communities with strong identities and values instinctively want to persuade others to share their views and celebrate their lifestyle in public. They spread like wildfire by nature.
Kang stated that these communities’ ideas can be exclusively focused on politics, religion, consumerism, sports, or a way of life, or they can be a combination of all of these.
Kang mentioned two particular Solana-based memecoins that have grown quickly: Doland Tremp (TREMP) and Jeo Boden (BODEN). These communities have been inhabited to people with “anti-woke, anti-Biden, and right-wing views.”
Since its March 9 start, BODEN has experienced tremendous growth, registering gains of more than 700,000%. According to CoinGecko data, Boden is now the 191st largest coin by total value, with a market capitalization of $473 million as of the time of posting.
Since its introduction on February 27, the Donald Trump parody coin TREMP has also seen notable growth, though not as much as BODEN. As per Birdeye data, it currently boasts a $73 million market capitalization.
Kang proposed that, independent of politics, memecoins that mimic popular consumer brands could benefit from a “circular economy” of gains. He named ZYN and MOUTAI as examples of brands in which his firm has invested.
Coins representing consumer brands, as opposed to animal coins, can benefit from the added benefit of capitalizing on the brand’s associated lifestyle for increased virality, according to Kang.
Kang concluded by saying that investing in memecoins was similar to choosing to invest in conventional assets that yield large returns.
Simply put, he stated, the assets that people can believe in the most are those that pump the hardest, such as stocks, real estate, metals, coins, etc.
Commentators in the cryptocurrency space disagree on how memecoins will affect the market, though.
Some claim memecoins are a risky, speculative jumble that violates the fundamental ideas of blockchain technology, while BitMEX co-founder Arthur Hayes claims they are a “net positive” for their individual blockchain networks.
For the first quarter of this year, memecoins have shown to be the most profitable segment of the cryptocurrency market, regardless of their impact on the ecosystem.
The top ten largest memecoins saw an average gain of 1,312.6% for holders in Q1, 2024, according to a CoinGecko market analysis.
According to CoinGecko analyst Lim Yu Qian, “the memecoin narrative was 33.3 times more profitable than the layer 2 narratives with the lowest returns in Q1 of this year, and 4.6 times more profitable than the next best-performing crypto narrative of tokenized real-world assets (RWA).”
