Subscribe to Cove to receive new posts directly to your inbox.
Outside of Bitcoin’s ETF flows, memecoins have been the dominant narrative in crypto throughout 2024. Maybe that’s not a coincidence.
First, what is a memecoin? And why are they so popular?
Memecoins can be defined as cryptocurrencies that have no intended value or utility. They exist to be funny or to capture a moment in time. Some might call them culture coins, but I think that’s too general.
Within memecoins, there are typically two subcategories:
PVP memecoins, which are tied to the popular internet meme of the day and fizzle out quickly. These are the ones you try to buy before everyone else does, and typically dump within 24 hours.
On the other hand, some memecoins have staying power. Think of DOGE, which hit a $100 billion market cap in the last crypto cycle.
These are bigger than your typical grifter pump-and-dump schemes. They’ve taken on a life of their own. Along with DOGE, a few others like BONK and WIF come to mind. These might have more in common with BTC than Bitcoiners are comfortable with.
Why have memecoins risen to such popularity in 2024? My thinking is that there has been a backlash in retail crypto against the VC-dominated projects of the last 3-4 years.
The typical altcoin launch works like this: a small fraction of the supply is released at launch, while the team and investors hold massive amounts that unlock after a year or more.
Many of these projects launch at inflated valuations, and there’s a feeling that the goal for the team is to create as much liquidity as possible so they and the investors can dump on retail traders, causing the price to fall indefinitely.
Memecoins, on the other hand, often have most (if not all) of their supply unlocked from the start. There are no investor allocations and no VCs to dump on you. Some would say they are true and fair community coins.
Is this a fair argument? I actually don’t think so, but it is the sentiment.
Like a true memecoin, Bitcoin has a lot of memetic value. It’s driven largely by the belief in ‘sound money’ (a meme), HODL (a meme), and the four-year halving cycle (a narrative that’s mostly a meme).
Bitcoiners often rely on these meme-like slogans, which spread Bitcoin’s message more through catchphrases than deep economic reasoning. Yes, Bitcoin’s blockchain offers certain security and censorship-resistant guarantees, but why does it hold its value when anyone can copy how it works?
Arguably, it’s because of the story.
So, does this make Bitcoin the ultimate memecoin? Maybe not in the conventional sense, but it comes it comes close. The Venn diagram definitely intersects.
Bitcoin is built on real technological advancements and has achieved a level of institutional adoption that most memecoins could only dream of, but it's runaway success is largely due to the way it spreads virally and has fostered a loyal community of believers…
If I had to choose, I would say Bitcoin is a memecoin, but it’s a special one: the ultimate, apex predator, unicorn memecoin.
cove
