Opinion: Welcoming the second phase of the bull market, Meme is a key sector

By Ri Yue Xiao Chu

Right now, it's fairly certain that the bull market has already started. To be precise, we're currently in the first phase of the bull market.

The upcoming second phase is the most crucial, as it represents the period when the majority of profits are made during a bull run. Missing or mistiming this phase could mean missing out on the entire bull market.

Let me briefly explain the first phase of the bull market: BTC leads the rally, only a few sectors show significant gains, while most altcoins underperform. The logic behind this was mentioned earlier in the referenced article, so I'll just repeat it here: 1) At the beginning of a market cycle, market confidence hasn't fully recovered. A strong surge in BTC is needed to signal that a major bull market has arrived. 2) When BTC experiences a minor pullback, due to the painful memories of previous bear markets, panic sets in and altcoins often drop even more sharply. 3) Altcoins usually have heavy trapped capital; even if major players want to pump them, they can repeatedly shake out weak hands at key levels.

The second phase of the bull market: As BTC’s rise strengthens market confidence, capital becomes increasingly active. Meanwhile, some sectors from the first phase have already seen explosive moves. This situation is extremely powerful. Once certain coins start surging, people begin benchmarking returns against them. But since only a few coins or sectors have risen, most market participants haven’t made money—or are still at a loss—leading to intense FOMO. As the saying goes: "I can suffer losses with my bros, but I can't stand it if you get rich alone." This dynamic makes the defining feature of the second phase: hot sectors will continue amplifying the wealth-effect narrative. The initial gains in these sectors become widely promoted, painting an optimistic picture of their future potential. It's critical to understand that a speculative cycle doesn't end because something has already multiplied many times over or reached a high market cap—it ends when there's a structural break in buying momentum. Right now, however, the opposite is happening: countless community members may verbally complain about their “rich bros,” but privately ask them for tips or allocations. Thus, the overall trend in Phase Two is broad-based market rallies, led by dominant sectors exhibiting strong wealth-generation effects. While broad gains are expected, our real goal is identifying sectors likely to experience outsized returns. In my view, that sector is MeMe. Reasons: 1) Over the past month, MeMe has shown the strongest performance and highest profit potential. 2) The idea of a "super-cycle" for MeMe may be debatable, but it's now widely accepted by the majority of market participants. 3) Binance has clearly increased its support for MeMe tokens, raising the ceiling for ordinary MeMe projects and significantly enhancing their wealth-generation potential. For most people (especially those who aren’t full-time developers or degens constantly chasing new launches), there are three main ways to play the MeMe sector:

1. Exchange-based MeMe Tokens

Exchange-listed MeMe tokens won’t deliver the thousand- or ten-thousand-fold returns seen with some on-chain projects, but they’re suitable for larger capital allocations or core holdings. During a bull market, only exchange-listed MeMe tokens offer sufficient liquidity to absorb large inflows of capital. If we consider trillion-dollar market caps as possible targets in this bull run, these assets still have 100x room to grow.

PNUT

PNUT is my favorite and will serve as the cornerstone of my portfolio. 1) It enjoys new endorsement from Elon Musk, placing its status just below DOGE—far above other memes merely liked by him. 2) PNUT symbolizes animal rights and opposition to corrupt laws. With Musk’s backing, it has also become linked to Trump’s election victory narrative. 3) It’s a newly listed token on Binance, and within the MeMe space, there may be a distinction between "new" and "old" narratives driving price action. 4) During the 2021 bull run, Musk used his influence to front-run DOGE and SHIB to dominance. If he repeats this playbook in the current cycle, PNUT appears to be the most fitting candidate.

ACT

Full name: AI Time (AI Era). AI-themed MeMe tokens have become one of the hottest topics. Although several AI Agent-related MeMe tokens have emerged, ACT is the only one listed on Binance, making it the top choice for large-capital investors seeking exposure through centralized exchanges. Like PNUT, it’s also a recent listing.

2. High-Quality On-Chain MeMe Tokens

Selecting high-quality MeMe tokens directly on-chain can also yield substantial upside. If lucky enough to get early exposure before a Binance listing, returns could be rocket-like. However, downside risk is equally sharp, so position sizing must remain within personal risk tolerance. I personally spend time researching this area. Recently, the surge in PUNT and ACT on Binance caused many high-quality on-chain MeMe tokens to rise sharply—but they’ve begun correcting across the board over the last couple of days. Any further pullback would present a solid buying opportunity.

3. Newly Emerging MeMe Tokens

This category requires real-time tracking of market trends and swift entry upon identification.

Positioning and Strategy

We’re currently transitioning from Phase One to Phase Two of the bull market. The definitive signal for full entry into Phase Two would be BTC posting several strong bullish daily candles, breaking out to a new higher level. However, waiting until after BTC shows such strength might mean entering altcoins at much higher prices.

Therefore, the recommended strategy is to gradually shift BTC holdings into altcoins now. Allocate more to key sectors, while establishing small starter positions in others. Prior to last month, the majority of my portfolio was in BTC. Starting last week, I began slowly reallocating from BTC into select altcoins, focusing primarily on PNUT and ACT.