Thoughts on MEME Coins and Value Investing

Recently, the news that the well-known media "Blue Fox Notes" plans to close its Knowledge Planet has been widely circulated online.

From the perspective of the Blue Fox Notes team, in the first two cycles, the team grasped the major trends based on fundamental value analysis, bringing a lot of insights to users. However, in this cycle, the previous value analysis method seems to be less effective, leading the team to decide to close its operations on Knowledge Planet.

In the comments on this news, many messages expressed regret, but also showed helplessness and pessimism towards "value analysis," with some even commenting, "Rather than investing in 'value coins', it's better to go all in on 'MEME coins'."

"Blue Fox Notes" is one of the media outlets I greatly respect in the industry. During the last DeFi wave, many of its articles provided me with valuable insights and reflections; it is a serious and in-depth media outlet. What is even more admirable is that, in such a difficult domestic environment, "Blue Fox Notes" has continued to produce valuable articles.

Therefore, I also feel regretful about its closure of this communication channel.

However, I do not agree with the pessimistic sentiment towards "value analysis" expressed in the comments.

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

First, a large number of tokens have achieved a high fully diluted market cap before they have truly played a role or developed an ecosystem.

Some users compared the valuation of tokens in this cycle with the previous one: in the last cycle, many value coins had a fully diluted market cap of only around ten thousand to a hundred thousand dollars when they first launched, while in this cycle, many tokens reached over a hundred million dollars upon launch. This has greatly overdrawn their future potential for price increases, resulting in them not showing upward momentum even when the market is favorable.

Many "value coins" are like this.

The second phenomenon is the surge of MEME coins, which have followed one after another.

In this wave, the popularity of MEME coins has surpassed the past, blooming across major chains, with Bitcoin, Ethereum, Solana, BASE, and more…

These MEME coins not only have astonishing price increases but also cover players from various ecosystems, unlike the past when only players from the Ethereum ecosystem and Dogecoin ecosystem had the opportunity to catch limited MEME coins.

In such a situation, it seems that as long as retail investors catch any MEME coin trend, they can reap considerable returns. Moreover, participating in MEME coins has no technical barriers and won't be "calculated" by institutional investors. This is much more cost-effective compared to participating in those so-called "value coins."

There are many reasons for these phenomena, and in my view, one important reason is that Ethereum, which holds a monopoly position in the application scenarios of the crypto ecosystem, has not seen any blockbuster innovative applications or disruptive scenarios in its development over the past two years.

This has led funds to continuously seek MEME coins that have emotional value and can quickly attract users, making MEME coins the objects of pursuit.

For these phenomena, I prefer to take a longer-term view. Because I firmly believe that only by looking at issues with a long-term perspective can we filter out the noise mixed with short-term fluctuations and grasp the fundamental vitality and potential of the crypto ecosystem.

From a long-term perspective, 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 existing in the crypto ecosystem and provide continuous value to users.

The vast majority of MEME coins provide emotional value, but emotions change over time. Very few MEME coins can provide continuous value for users' ever-changing emotions, so the vast majority of MEME coins will eventually perish. The few that can survive either have irreplaceable historical value or evolve into value coins with application value—this ultimately returns to value and fundamentals.

Therefore, I believe that most of the prices and values of the currently bustling MEME coins are difficult to sustain in the long term. We cannot assume that the majority of them have continuous and stable value just because they are currently popular.

Meanwhile, many value coins that appear to be overpriced are somewhat lacking in value empowerment and transformation; some have had their prices artificially inflated, but their intrinsic value still exists, and many projects have good intrinsic value and can develop steadily and continuously. I believe that once the right opportunity arises in the future, they will eventually explode.

As for the stories of "XXX getting rich from MEME," I suggest being cautious in viewing them.

I do not believe that most people can achieve wealth through buying and selling MEME coins and can truly hold onto that wealth. Because it is very difficult for ordinary investors to grasp the right buying and selling points amid the significant fluctuations of MEME coins, and even if they are fortunate enough to seize such opportunities, very few will place heavy bets on MEME coins—betting heavily on such coins is akin to gambling.

So, we should treat MEME coins as a game, participating with a mindset of entertainment and humor, and if we can gain a little happy wealth from it, that would be great.

Ultimately, what can truly allow us to move forward with confidence and achieve stable, continuous, and long-term wealth upgrades is still value coins, especially Bitcoin and Ethereum, which occupy a large portion of the portfolio.