In a bull market cycle, skillfully leverage MEME premiums to generate higher returns

Author: MATTI

Translation: TechFlow

During past bull markets, meme coins—especially Doge—emerged as a genuine type of cryptocurrency. But it's not just meme coins that are subject to meme premium. In fact, every successful token is influenced by it. I'd even argue that every product wrapped in branding contains a meme premium.

Doge’s spiritual godfather

Meme premium is a phenomenon where people assign higher monetary value to an idea because:

1. They see others also valuing the idea

2. They expect more people will come to value it

Meme premium is an endless game of imitative beauty contests. It’s a pure form of speculation that existed long before humans even knew what financial speculation was. As Plato said through Durant:

“Men quickly tire of what they have and desire what they do not; they rarely desire anything unless it belongs to someone else.”

In a social media-dominated world, speculation has become a new form of consumption. What was once serious becomes entertainment, and entertainment turns serious. We politicize entertainment, turning wars or inflation into spectacles to be consumed. Cryptocurrency is very much part of this cultural shift.

In the last cycle, crypto degen culture was portrayed as the dark, fringe side of the space—but it was precisely this culture that drove the cycle. NFT profile pictures, meme coins, and yield-farming Ponzi schemes became entertainment. Even the collapses and scapegoating of Three Arrows Capital, Do Kwon, and SBF were widely shared and consumed with a sense of enjoyment.

While the most “serious” crypto investors talk about crypto infrastructure SaaS, crypto degens have been thriving—and I believe we’re now entering the most spectacular phase of degen behavior in crypto history. We’re doubling down on the madness—whether it’s meme coins, SocialFi, GameFi, or restaking.

Compared to the previous cycle, meme premium was mostly implicit. This time, it will become fully explicit. Crypto will become more degen than ever. This might mean you don’t need to buy Doge to invest in memes—you can buy any token, because the truth is out: every token is a meme coin.

Analyzing (3,3)

I’ve previously argued that Coca-Cola stock has little fundamental value beyond its brand and the resulting consumer demand. I suggest that trading crypto is a form of consumption, much like drinking sugary beverages. Coca-Cola stock is just a sticky Lollapalooza (RIP Charlie Munger).

Munger wasn’t a fan of crypto—he called it “cryptoshit” and “cryptocrapo.” While his immense wisdom will be deeply missed, his outdated views on what is tradable are less so. Still, I believe if Munger were in his 20s or 30s today, there would be a chapter on meme premium in The Poor Charlie Almanack.

I’m merely proposing to update some outdated wisdom with today’s experimental constructs worth trillions. Their scale may still be small, and individual success probabilities slim—but they are growing. Instead of dismissively rejecting them, cynics should try to better understand them. After all, technology underpins societal development—not the other way around.

Let us strive to understand crypto as a consumer product, rather than normatively oppose its mode of consumption. Capitalism is driven by markets, and markets are driven by consumption.

Speculation is a form of consumption. Every brand in the world relies on meme premium. The (3,3) narrative that ruled OlympusDAO in 2021 explicitly embodied meme premium.

This is where we find ourselves on the crypto adoption curve: transitioning from memes for memes’ sake to memes with utility (i.e., SocialFi). At this point, I hope we can agree that our tokens largely depend on meme premium—and there’s nothing wrong with that.

In this cycle, memes will directly monetize, reducing the need to invest specifically in meme coins. Memes as coordination tools make pricing them a social game. I wouldn’t be surprised if value flows from silly meme coins into smaller coordination experiments with “infinite” upside potential.

Our equivalent of DeFi Summer might be a meme summer wrapped in SocialFi narratives (for now, Blast season seems to be a Schelling point). Instead of investing in one overplayed meme like Doge and its clones, people might engage in various mini-games with specific purposes.

After all, money is a coordination game, and price is a signal. OlympusDAO’s (3,3) presented a meme with everything: GameFi, SocialFi, and a serious attempt at utility. It was a true meme coin—even more significant than Doge. Because if you view a meme coin only as a meme coin, the magic of these foolish crowds is bound to be short-lived.

Learning how to price memes has always been finance’s alchemy. The market wizards era had different memes. From the invention of derivatives to meme coins, finance continues evolving as markets expand into the boundless digital world.

To fully harness the power of crypto means understanding reflexivity—not as prices going up or down, but as prices transforming fundamentals. The world can change with the market. Meme premium is potential energy that can be converted into kinetic energy.

The late 2020s and 2030s could be the golden age of meme-value-oriented crypto hedge funds that embrace the inherent reflexivity of digital assets. Crypto may have spent some time denying itself, but only by embracing its true nature can it maximize its real value.