Beware the Memecoin Massacre
Fools Dabble in Memecoins, Savvy Money Invests in Utility
Humans love stories.
Fiction brings us great joy.
It lets us escape our lives for a while and have all sorts of adventures without the risk of being in those situations!
Love stories, thrillers, mysteries, dramas and horror - whatever your taste is - it’s there for you.
But fiction is a dangerous thing to stake your financial wellbeing on!
… and memecoins are just that. A fiction with absolutely no value.
Right now it may seem like a fun mystery novel to be gambling in this latest crazy - mystery because their true value and purpose remain a mystery.
Over the past 8 months, while Bitcoin and a select few cryptos have enjoyed a broader rally, many altcoins have been left behind.
What gives?
Watch this video to find out…
The Answer
In part, it’s because memecoins have captured the attention of retail investors and dominated the conversation.
This isn’t a problem… if you haven’t gotten caught up in the hype BS. On the contrary, I see it as a massive opportunity. But I am worried for the memecoin dabblers.
The fun fiction will turn from sexy mystery to horror soon enough.
This memecoin obsession comes at a cost.
While many retail investors (aka novice) are gambling in the memecoin casino, the savvy money is taking ownership of the house.
Here’s why it’s fiction...
Memecoins don’t have any real-world use cases. By design.
Utility - the use and value of something is one of the most fundamental characteristics of an asset.
BUT in memecoin circles the term "utility" has become almost a dirty word, as if having a real-world use case is somehow a disadvantage.
This is a trap.
The real danger is NOT that you’ll lose all your money in the coming memecoin massacre.
You will if you are letting yourself get sucked in.
That’s one of the dangers, but…
The REAL danger in getting distracted by memecoin hype is that you miss out on the coins that will help usher in mass adoption, while everything else fades away.
The Real Opportunity
As demonstrated by the famous adoption S curve - Adoption happens in two stages: slowly with early adopters at first and then suddenly with mass adoption.
The S curve has been instrumental in describing a myriad of phenomena beyond population growth. In technology adoption, for instance, the curve is used to understand how new technologies are gradually embraced by the public. Starting with early adopters, the technology’s popularity grows exponentially as it gains more acceptance, before finally reaching a saturation point where the market is fully penetrated.
Crypto is just leaving the slow early adoption phase and entering into the rapid early majority adoption phase.
People will be shocked at the speed of global adoption once it takes off.
In its first 10 years, Crypto has seen a much faster adoption rate than the internet. By 2019, the number of Bitcoin users had reached 35 million, which is more than double the number of users the internet had in its first 10 years and to date there are now around half a billion users, 100 million more than the Internet at the same stage.
There’s a simple reason for this.
With the internet, we had to deploy hardware to get people online. Undersea cables, satellites, cell towers, data centres, last-mile infrastructure. All of it to get people connected.
With crypto, for most it's just a software update. Any software update that makes it easier for users to adopt crypto will push the needle forward.
A recent game-changer for altcoins is the approval and launch of the Ethereum ETF following on from the spot Bitcoin ETF approval.
This move legitimises not just Ethereum but the entire altcoin asset class.
It opens the door for institutional investors to gain exposure to a broader range of cryptocurrencies beyond Bitcoin and provides a new level of credibility and accessibility for the market as a whole.
The impact is not yet fully priced into the market, which means there is still significant upside potential for altcoins with real utility.
And that’s the whole point - the assets that will last and make you rich are the ones that add value to the world and it is no different with cryptocurrencies.
As more investors start to recognize the potential of the underlying technology, we will see a major shift in the market dynamics.
The Flight to Quality
As the memecoin mania implodes, we are likely to see a "flight to quality" as investors seek out projects with mass-adoption potential.
Meanwhile, gamblers and novices who have put all their eggs in the memecoin basket will find themselves left out in the cold.
The NFT market and previous memecoin mania like the lunatic dogecoin joke provides a cautionary tale for what could happen when this memecoin bubble bursts.
After months of hype and soaring prices, the NFT market experienced a massive correction, leaving many investors with HUGE losses.
The same fate will befall memecoins once the fiction hype cycle has run its course.
By focusing on utility, fundamentals, and long-term value creation, investors can position themselves to benefit from the next wave of innovation and growth in the cryptocurrency market.
The flight to quality is not about chasing the latest trend or jumping on the bandwagon. It's about identifying the assets that have the potential to deliver real, lasting value and being patient enough to see that potential realised.
As the market matures and evolves, it's the altcoins with genuine utility that will ultimately emerge as the winners. And for those who are willing to look beyond the hype and invest in the future, the rewards could be tremendous.
In our Wealth Builder Club I share the list of altcoins I am interested in and their utility. And you also get access to a range of crypto investing training programmes on how to invest in cryptocurrencies.
This is just one tiny part of the value and resources you get when you are a Wealth Builder Club insider.
Go here to find out what The Wealth Builder Club is all about and how to become a member today - and get my altcoin insights to add to your solid asset portfolio.
Huge love,
Ann
