Is the ‘memecoin supercycle’ already over? Analysts weigh in.

Memecoins have experienced a massive crash run over the past year, with many tokens, including newcomers Pepe (PEPE), Dogwifhat (WIF) and Popcat (POPCAT), gaining over 30,000% since their inception.

Many memecoin advocates wait for new retail investors to appear and immediately start bidding memecoins to a new high price. So far, crypto-natives seem to be more interested in what they collectively call “dino coins.”

“Dino coins” are older altcoins like Ripple's XRP and Tron (TRX), which have recently risen to new domestic and all-time highs.

Meanwhile, many of the major new-cycle memecoins—excluding BONK and Pepe—failed to breach all-time highs in the recent market mania, sparking fears that a “memecoin supercycle” might be coming to an end. premature end.

Memecoin evangelist Murad Mahmudov cemented the term “memecoin supercycle” into the crypto collective consciousness during his bullish keynote speech in the assets segment at the Token2049 conference in Singapore.

He noted MemeCoin's strong performance over the past year, compared to legitimate projects, and noted that this trend will continue amid retail mania.

Memecoins are a subset of popular high-value crypto assets. They don't provide any services, they don't accelerate payments, they don't bring new financial innovation, or they don't provide any benefits.

Still, this lack of fundamentals is what drives them to skyrocketing valuations, and it's one of the main reasons Mahmumov says the memecoin supercycle is just getting started.

Mahmudov told Cointelegraph that unlike mainstream projects in decentralized finance (DeFi) and infrastructure, the true value of memecoins can never be determined using any of the quantitative techniques available in the world of high finance.

“If DeFi protocols start paying stakes to their followers, we have a 500-year history of how we value assets based on cash flow. Then the investment bankers kind of come in and say, ‘Well, why am I paying 200 inflation for this thing?' They are going to say.

“So if you're an asset that trades and moves in a memetic fashion, the sky's the limit because who knows that value?”

Memecoins is the only game used in international markets.

The key to finding out if the memecoin supercycle is already over can be found in the “Global Macro”, referring to interest rates, central bank behavior and general financial conditions.

“As long as there is global liquidity, as long as there is risk-taking behavior in traditional markets, memecoins will do even better. But if there is a recession, memecoins may not.

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The way I see it, crypto is generally 2x to 3x beta to traditional markets and memecoins are 7x to 8x beta in the grand scheme of things.

Can Memes Really End?

SwiftX analyst Pav Hundal agreed with Mahmudov, saying that memes are nothing more than a risky and unprofitable play on the rest of the crypto industry and the wider global financial market.

If the broader market conditions improve, memecoins should do better, however, if the scales tip in the other direction, memecoin investors may see a hemorrhaging.

“What you need to understand now about this cycle is that global liquidity is high, regulatory risk is low, and I expect the US dollar to weaken.”

“It's like going to Monte Carlo. There is money everywhere and it is spiraling towards disaster. The trend is at the technical level. If the market goes up, so will Memcoins,” he added.

Hundel cautioned that investors should expect boldness from recent rallies, while cautioning against meme fatigue.

“Maybe the market is getting a little ahead of itself, but when you have 150+% rallies, it's reasonable to expect something cool,” he said.

“It's impossible to imagine a future world where censorship, meme exhaustion, or erasure of culture is a threat to memecoins. We've seen CZ state that memecoins are exotic,” added Hundel, in 2015. A nod from former Binance CEO Changpeng Zhao on Twitter on November 26.

OKX Chief Commercial Officer Lennox Leigh said the term “memecoin supercycle” may be a bit far-fetched, as the current market conditions for memecoins and crypto assets suggest an “expansion” rather than a cycle ending.

Still, the rapid growth of the Solana ecosystem for new memecoins on the main blockchain, combined with the transient nature of its assets, suggests increased volatility for its assets going forward.

“Traders must remember that the crypto market will continue to see volatility in the short term, Bitcoin is probably experiencing 10%-15% retracements in the coming weeks, while memecoins can see very dramatic price swings,” he said.

Memecoins are a ‘certified community'

Despite the “fantasy” surrounding memecoins, Mahmudov says it's not all about impressive valuations and ridiculous price targets.

Mahmudov, who often refers to memecoins as a lucrative “cult” and invokes religious themes, said the tokens offer more than just the promise of cashback.

“At the risk of sounding a little insulting, if you look at religion as a product, like a service, uh, you know, what does it give people?”

“It makes sense to people.”

“Memecoins give people family. They give people identity, community, and friendship. Oh, and they give people a sense of ownership, purpose, and mission. To Mahmove, this mindset between holders creates a symbiotic feedback loop for memecoin owners and, in turn, price targets.”

Mahmudov traces the recent performance of older altcoins like XRP, Cardano (ADA) and Chainlink (LINK) to their community's “cult” status.

You need to understand exactly how famous the cult members of these communities are – and this is the main power.

‘The bravest thing you can get for a token is that people are full-time unpaid evangelists for the project. We have seen this many times with Ripple, Chainlink, Cardano and Dogecoin,” he added.

Still, anonymous trader 0x_kun raised the question of whether all the price performance can be traced back to the cult status of their community, a fundamental belief in the token's utility — justified or not — is what really matters at the end of the day.

“The difference is that XRP owners really believe in the fundamentals, they don't buy into social cults.”

In a post to X on Dec. 3, he wrote, “If you tell the XRP holder it's a comeback meme, they'll tear you down.

Is pump.fun bad for memecoins?

The meteoric rise of Solana-based memecoin deployer Pump.fun has already created quite a stir in crypto circles. Many commentators have criticized the protocol as the “greatest” product of all time and see it as an unavoidable net negative for the industry.

Other critics say that the memecoin launchpad has significantly clouded user focus on hundreds of thousands of memecoins, essentially ruining Solana's upward trajectory for large “blue chip” memecoins.

On November 25th, Pump.fun suspended its live stream in response to reports of harmful content posted by users to draw attention to newly launched tokens.

Live streaming controversy aside, Mahmudov says that being able to launch memecoins at the press of a button is an inevitable step forward in technology, so it's not worth worrying too much about.

“It's pointless to be mad at Pump.fun. One-click memecoin creation was always going to take off on its own,” he said. “It's a natural evolution of techno-capitalism, essentially tokenizing everything, memecoining everything, coining everything.”

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Finally, Mahmudov says that Pump.fun or any single click token launch platform will divide the industry in two.

“One part is the gambling side, which is all fast-moving. It's high-stakes. It's all a ‘flavor of the day' kind of thing.”

But the second is long-term community building. It's brand building. It is a ritual construct. It's more — for lack of a better example — let's try to build the next $100 billion movement, the next Dogecoin — and that second part is what I'm looking for.

“You have to analyze those two markets separately.”