Thoughts on MEME coin and value investment

Source: Daoshuo Blockchain

Recently, the news that the well-known media "Blue Fox Notes" in the circle plans to close the Knowledge Planet has been widely circulated on the Internet.

In the view of the Blue Fox Notes team, the team grasped the general trend in the first two cycles based on the fundamental value analysis, which brought a lot of thinking to the majority of users. But in this cycle, the previous value analysis method does not seem to work very well, so the team decided to close its operation on the Knowledge Planet.

In the comments on this message, many messages not only expressed regret, but also expressed helplessness and pessimism about "value analysis", and even left a message saying "Instead of investing in "value coins", it is better to go all-in on "MEME coins".

"Blue Fox Notes" is one of the media in the circle that I respect very much. In the last round of DeFi boom, many of its articles gave me extremely valuable inspiration and thinking. It is a serious and in-depth media. What is even more admirable is that in such a difficult environment in China, "Blue Fox Notes" has been continuously outputting valuable articles.

So I also feel very sorry for it to close this communication channel.

However, I disagree with the pessimistic sentiment of "value analysis" expressed in the message area.

In the past two years of market conditions, we can clearly see two very special phenomena in the crypto ecosystem:

First, a large number of tokens have a high total circulation market value before they really play a role and develop an ecosystem.

Some users compared the difference between the valuation of tokens in this round of market conditions and the previous round of market conditions: in the previous round of market conditions, the total circulation market value of many value coins when they were first launched was only tens of millions of US dollars, while in this round, many tokens reached hundreds of millions of US dollars as soon as they were launched. This greatly overdraws their future growth potential, resulting in them not showing the momentum of rising even when the market is good.

Many "value coins" are like this.

The second is that the MEME coin market has come one after another.

In this round of trend, the grand occasion of MEME coins has exceeded the past, and it has blossomed on all major chains, including Bitcoin, Ethereum, Solana, BASE...

These MEME coins have not only increased dramatically, but also covered players from all ecosystems, unlike in the past when only players from the Ethereum ecosystem and Dogecoin ecosystem had the opportunity to catch limited MEME coins.

Under such circumstances, it seems that as long as retail investors catch the market of any MEME coin, they can reap considerable returns. And participating in MEME coins has neither technical barriers nor will it be "calculated" by institutional investors. This is much more cost-effective than participating in those so-called "value coins".

There are many reasons for these phenomena. In my opinion, a very important reason is that Ethereum, which has a monopoly in the application scenarios of the crypto ecosystem, has not seen any explosive innovative applications and subversive scenarios in the development of the past two years.

This has led to funds only being able to constantly look for MEME coins that have emotional value and can quickly attract users, making MEME coins a sought-after object.

I will look at these phenomena with a longer-term perspective. Because I always believe that only by looking at the problem from a long-term perspective can we filter out the short-term noise and grasp the fundamental vitality and potential of the crypto ecosystem.

In the long run, to promote the growth of the crypto ecosystem and drive the appreciation of crypto assets, there must be real ecological applications. Only applications can solve the problems in the crypto ecosystem and provide continuous value to users.

The vast majority of MEME coins provide emotional value, but emotions change over time. Few MEME coins can provide continuous value for users' changing emotions, so the vast majority of MEME coins will eventually die out. The few that can survive either have irreplaceable value in history; or evolve into value coins with application value - this is still a return to value and fundamentals.

So I think that the prices and values ​​of most of the MEME coins that seem to be very lively now are difficult to sustain in the long run. We cannot assume that most of them have continuous and stable value just because they are currently lively for a while.

Now, many value coins that seem to be overpriced lack the empowerment and transformation of value, and some are artificially driven up in price, but their intrinsic value still exists, and many projects have good intrinsic value and can develop stably and continuously. I believe that once there is a suitable opportunity in the future, they will eventually explode.

As for the story of "XXX got rich by MEME", I suggest you look at it with caution.

I don't believe that most people can get rich by buying and selling MEME coins and can really hold this wealth. Because it is difficult for ordinary investors to grasp the right buying and selling points from the large fluctuations of MEME coins, and even if they are lucky enough to catch such an opportunity, they will rarely bet heavily on MEME coins-------betting heavily on such coins is tantamount to gambling.

So we treat MEME coins as a game, participate in it with an entertaining and joking mentality, and it would be great if we can get a small fortune that makes people happy from it.

Ultimately, what will enable us to move forward with confidence and achieve stable, continuous and long-term wealth upgrades is still value coins, especially Bitcoin and Ethereum, which account for the majority of positions.