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Buying meme coins is like buying lottery tickets? However, Andrew Kang, Co-founder of Mechanism Capital, disagrees. He believes that meme coins, as an asset, are more likely to be viewed as investments rather than mere gambling or entertainment. What's your take on meme coins?
Since the popularity of the meme coin BOME (BOOK OF MEME) on Solana, the meme coin craze has swept through again, with a series of fundraising projects emerging like mushrooms, even expanding to other public chains. For many, this "rush to meme coins" behavior seems akin to buying lottery tickets and relying on luck! But Andrew Kang holds a different view.
Kang delves into the market potential and investment mentality of meme coins. He points out that although meme coins are often likened to casinos or lotteries, their market size may far exceed the latter, potentially reaching up to 100 times. People are more inclined to see meme coins as an investment rather than mere gambling entertainment. According to Kang, the proportion of global personal wealth invested in casinos is usually less than 2%, and few people invest all their assets in them.
In contrast, investors have more diversified allocations for meme coins: conservative investors may allocate 1-5%, while more risk-tolerant "degen" (hotspot chasers) may invest 10-50%. Even those who invest according to the Kelly Criterion may invest more than 100%. Kang refutes the view that the meme coin market is a zero-sum game.
He believes that the meme coin market will continue to reach higher highs and higher lows in future cycles, expecting the overall market value to grow over the next decade. According to Coingecko data, the current top three meme coins are $DOGE, $SHIB, and $PEPE, with a total market capitalization of approximately $41.8 billion and a 24-hour trading volume of up to $6 billion. Despite the recent price correction of the popular meme coin BOME, its market capitalization still stands at $1 billion. |
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Post time 27-3-2024 06:46:01