TRUMP effect: from absurdity to financial darling

Memecoin is becoming an important investment category.

Article author: CHARLES WAYN

Article Source: Cointelegraph

Article compilation: Bitui

When examining the current financial market landscape, one might be reminded of Camus’ words: “Realizing the absurdity of life is not the end, but just a beginning.” This viewpoint perfectly applies to the field of memecoins.

The meme coin (Memecoin) is by no means child’s play

This was fully demonstrated after the official meme coin TRUMP of US President Donald Trump was launched. In just one weekend, TRUMP’s market value soared to over $12 billion, ranking 21st among all cryptocurrencies. At the same time, Melania’s meme coin MELANIA also went online simultaneously. As of press time, the trading volume of these two meme coins even caused the Solana blockchain to crash. There is no doubt that meme coins have become a financial phenomenon that cannot be ignored. However, meme coins are often ridiculed in the traditional financial sector. The traditional financial industry finds it difficult to understand why a cryptocurrency with dogs as its theme, Dogecoin, has a market value of $56 billion, surpassing the market value of Volkswagen, which has an 86-year history, of $48 billion.

From a traditional perspective, a cryptocurrency with a dog as the theme seems to be more valuable than a century-old car company that sells millions of cars globally every year, which seems to make no sense. After all, a car company creates real economic benefits, while meme coins seem to only provide entertainment value.

However, Dogecoin is not an exception. In fact, with the launch of TRUMP, the total market value of Memecoin has exceeded 126 billion US dollars, surpassing countless traditional enterprises, and only 2 billion US dollars away from the market value of the decentralized finance (DeFi) field. This phenomenon once again proves that Memecoin is no longer just a “joke”, but an undeniable force in the financial market.

When Financial Nihilism Meets the New Darling of Investment

It is a wrong perspective to try to evaluate memecoins using traditional financial indicators, as countless trends indicate that memecoins are gradually becoming an independent investment category. These trends include the rise of financial nihilism, as Travis Kling pointed out, the younger generation is gradually realizing that traditional wealth creation and economic stability pathways, such as homeownership, are out of reach for them.

When you have nothing to lose but the possibility of gaining everything, investing in meme coins seems to carry little risk. This type of investment not only doesn’t require a high initial cost, but also has the potential for substantial returns.

By contrast, existing cryptocurrency project models heavily favor providing quick, high-profit exit opportunities for venture capital firms, rather than allowing the cryptocurrency-supporting community to participate at a fair price.

The meme coins provide an alternative to this status quo, and for many, they seem to be a return to the community ideals upon which the cryptocurrency industry was originally built. This trend has even prompted well-known cryptocurrency figure Murad to suggest that we are in the midst of a “super cycle” for meme coins.

In addition to these intrinsic drivers, the appeal of meme coins is further enhanced by their accessibility and cultural relevance. Over the past year, meme coins have become more popular, with many blockchain and ecosystems offering a user experience comparable to centralized exchanges without the cumbersome verification process.

The community is the core of Mimetic Coin

In addition, Dogecoin has successfully integrated into popular culture, as evidenced by the overnight popularity of TRUMP. At the same time, even the latest season of the popular Netflix series ‘Squid Game’ portrays a failed meme coin developer. In fact, the world’s richest person, Elon Musk, is also a public supporter of Dogecoin (DOGE).

The low price of Dogecoin further enhances its attractiveness, as the prospect of a coin rising to $1 is a powerful psychological driving force for those seeking life-changing returns.

Meme coins are not just animal-themed internet tokens for gambling. As Murad said, coins like Dogecoin also trigger a deep desire in the human heart for community and belonging. The success of TRUMP coin once again proves this point, with millions of people uniting around this coin in a socio-political context, as if it were a collective middle finger to the opposition.

In fact, as the World Health Organization (WHO) lists loneliness as a major global health issue, more and more people are seeking ways to connect online and find each other through meme coins like TRUMP, which is not surprising. As Generation Z likes to say, “if you know, you know” (iykyk).

From Bear Market to Blockchain: The Rise of Meme Coins

Meme coins are attracting more and more developers to build projects around them. For example, Berachain, originally just a meme coin themed around bears, has now evolved into a blockchain ecosystem optimized for DeFi and introduced a new mechanism called ‘Proof-of-Liquidity’.

Despite still being in the testnet stage, Berachain provides an excellent experimental ground for other projects, covering a wide range of innovative products from new AI agents to ‘vape-to-earn’.

Once this chain is officially launched, all of these products will run on its mainnet, and the claim that “meme coins are completely useless” may be thoroughly overturned. At the very least, it indicates that meme coins, as a convergence of technology, community, and fun, provide a perfect soil for innovation.

Meme coins are also a place to make big money. For example, TRUMP coin increased Donald Trump’s net worth by about 50% overnight, and reportedly, an early lucky investor made $20 million by buying in early.

While it is easy for people to view Dogecoin as a silly joke, those who hold this view should remember that traditional financial institutions managing billions of dollars in Bitcoin strategies (TradFi) also used to widely dismiss Bitcoin as a ‘magical internet currency’.

Meanwhile, governments around the world are implementing or considering Bitcoin as a reserve currency. Dogecoin was initially just an overnight joke, but now its market value exceeds that of one of the world’s largest automakers. And TRUMP coin seems to be redefining what we know as meme coins.

Nihilism, easy accessibility, and community are the three major trends driving meme coins to become a more serious investment category this year, and technological developments are proving that they are transcending their entertainment attributes. As meme coins gradually evolve into community-driven products, the underlying tokens will also transition from absurd jokes to core assets in portfolios, and TRUMP coin is just the beginning.