What Is the Memecoin Supercycle?

What Is the Memecoin Supercycle?

The memecoin supercycle refers to a market phenomenon where memecoins outperform other sectors in the crypto industry, driven by speculation, viral internet culture, and community engagement. Memecoins, known for their potential to generate astronomical returns, thrive on hype and collective enthusiasm.

In May 2021, the memecoin market cap peaked at nearly $90 billion before plummeting below $15 billion the following year, leading many to dismiss it as a bubble. However, after a prolonged period of consolidation, the memecoin market cap surged again in March 2024, surpassing its all-time highs in November 2024.

Remarkably, as of late 2024, ten memecoins boast market caps exceeding $1 billion, with Peanut the Squirrel (PNUT) achieving a monumental rise from $100 million to over $2 billion in just three days, marking a 1,900% increase.

Is this resurgence the beginning of a full-fledged memecoin supercycle, or merely a fleeting rally? Let’s dive deeper.

The Nature of a Memecoin Supercycle

A memecoin supercycle typically unleashes a highly bullish market, with skyrocketing prices and rapid growth across the sector. Unlike traditional financial markets, where value is tethered to fundamentals, memecoin valuations depend entirely on internet culture and community-driven momentum.

Memecoins thrive on fast-changing online trends and the viral potential of social media. A project with little utility can leap into the spotlight, attracting millions (or even billions) in valuation almost overnight. This speculative nature makes memecoin supercycles both alluring and unpredictable.

Murad Mahmudov’s Memecoin Supercycle Theory

Crypto analyst and memecoin advocate Murad Mahmudov has become one of the foremost voices in the memecoin movement. At the TOKEN2049 conference in September 2024, Mahmudov declared that the memecoin supercycle is no longer a prediction but a reality, emphasizing its transformative potential to surpass a $1 trillion market cap.

Here are some key insights from his analysis:

1. The Supercycle Is Already Here

Mahmudov highlighted how the memecoin market significantly outperformed other crypto sectors in 2024. While major tokens like BTC, ETH, and SOL showed modest gains of around 22%, and other sectors such as Ethereum DeFi and Solana DeFi performed poorly with returns of -14% and 6%, respectively, memecoins stole the spotlight.

Older memecoins, such as Dogecoin and Shiba Inu, saw gains averaging 105%, while newer coins like Pepe (PEPE) and Peanut the Squirrel (PNUT) achieved returns of over 2,000%.

2. Retail Investors Are Joining the Memecoin Movement

Mahmudov pointed out that most retail investors are not drawn to the complexities of blockchain technology. Memecoins offer a simple and accessible entry point for new investors, where the “token itself becomes the product.”

This simplicity, combined with strong community engagement, has made memecoins a favorite among non-technical retail investors.

3. Overproduction of Tokens and the Fair Launch Model

The crypto space has seen an explosion in token production, with over 600,000 new tokens launched in 2024 alone. While many of these tokens failed to deliver returns, memecoins benefited from the rise of fair launch platforms like Pump.fun, which ensure transparent distribution by requiring creators to purchase tokens alongside buyers.

Interestingly, of the 43 tokens that outperformed Bitcoin in 2024, 13 were memecoins.

4. Converting Non-Believers into Memecoin Enthusiasts

Beyond financial gains, memecoins tap into the human need for belonging and self-expression. They serve as a form of entertainment, fostering community connections through shared humor and goals. Their simplicity and high liquidity make them particularly appealing to crypto newcomers.

Noteworthy Memecoins to Watch

Mahmudov has listed several promising memecoins he believes are poised for growth into 2025. Among them are:

• SPX6900 (SPX): Aimed at flipping the stock market, with a vision for a $69 trillion market cap.
• GigaChad (GIGA): Inspired by the hyper-masculine internet meme, representing peak performance.
• Mog Coin (MOG): Known for its cultural appeal and strong community.
• Peanut the Squirrel (PNUT): Achieved a 1,900% rise in just three days.
• Popcat (POPCAT): Popular among cat lovers, leveraging the viral Popcat meme.

A Brief History of Memecoin Supercycles

First Supercycle (2017–2018):

Dogecoin led the way, surging by 8,700% within a year, as the total crypto market cap grew from $18 billion to $850 billion.

Second Supercycle (2020–2021):

Fueled by pandemic-driven retail trading, Dogecoin surged 12,200%, while Shiba Inu delivered a jaw-dropping 10,125,000% return for early holders.

Third Supercycle (2023–2024):

Emerging in late 2023, this supercycle saw memecoin market caps rise from $20 billion in January 2024 to $110 billion by November. New entrants like Bonk, Dogwifhat, and PNUT have driven much of the growth.

How to Navigate the Memecoin Supercycle

1. Conduct Thorough Research:
   Investigate token fundamentals, whitepapers, team credentials, and community engagement before investing.
2. Diversify Your Portfolio:
   Balance your investments across established coins like DOGE and SHIB and trending newcomers such as PNUT or SPX6900.
3. Invest Cautiously:
   Only invest amounts you can afford to lose, as memecoins are highly volatile.

Conclusion

The ongoing memecoin supercycle has revitalized the crypto space, offering lucrative opportunities for traders and early investors. While its speculative nature demands caution, the combination of internet virality and community enthusiasm ensures that memecoins remain a formidable force in the market.