Meme Coin Price Surge and Crash Revelation: When the Story Is More Valuable Than Cash Flow

I spend my holidays at home reading news from exchanges and I’ve noticed an interesting phenomenon.

When the traditional stock market closes as usual, a few obscure Meme coins are staging a疯狂 wealth carnival within the ecosystem of a major trading platform. Tokens like Meme4, PALU—names that sound like jokes—see their market caps multiply dozens of times in just a few days. Early community members are easily seeing profits exceeding one million USD on paper, opinion leaders on Twitter are cheering and celebrating as if they’ve discovered a new continent.

The second act of the story came quickly. Starting mid-October, these tokens began free-falling. Single-day declines reached as high as 95%, cold data recorded everything: over 100,000 traders were liquidated, totaling $621 million. The myth of overnight riches instantly turned into a blood and tears story for the retail investors.

I’ve seen similar scenes both on Wall Street and in Lujiazui.

Remember the GameStop event in 2021? Collective action by retail investors on international social platforms drove the stock price of a near-bankrupt game retailer to the sky. Short-selling institutions suffered huge losses, and the heads of international regulators even called it a “milestone in behavioral finance.” Their logic was clear: as long as trading is genuine and information disclosure is sufficient, even absurd prices are part of the market.

The logic of international finance is this: let bubbles form because bubbles are catalysts for market evolution.

If this Meme coin frenzy had happened on mainstream international exchanges, the story would be entirely different. It would spawn a bunch of new financial products—like “Meme Token ETFs”—quantifying social hype into investment factors. Financial media would analyze at length the “victory of retail capitalism”; regulators would initiate studies on “social media market manipulation,” but ultimately might conclude: this isn’t fraud, just a collective financial response driven by group sentiment through algorithmic matchmaking and social dissemination.

But in China, the story is completely different. If a currency like “Binance Life” appeared in the Shanghai, Shenzhen, or Beijing A-shares, regulators would immediately issue risk alerts, media would call for rational investing, and the entire event would be defined as a “speculative market anomaly,” becoming a vivid teaching example for investor education. China’s market logic is “steady progress”—it’s okay to be lively, but order must be maintained; innovation is welcome, risks are borne by individuals.

But the crypto market lives in a parallel universe

Crypto, this thing, is neither constrained by international regulators nor governed by the domestic securities commission. It’s a true no-man’s land, a gray financial experiment formed by code, liquidity, and narratives self-organizing.

Here, international-style social speculation mechanisms (information diffusion + collective momentum) wonderfully blend with grassroots wealth psychology (resonance + community participation).

Exchanges are no longer neutral platforms but have become “narrative creators”; opinion leaders are no longer bystanders but amplifiers of prices; retail investors indulge in self-celebration and self-destruction within cycles of algorithms and consensus.

The deepest change is: prices are no longer determined by cash flow but by the speed of narratives and the density of consensus. We are witnessing the birth of a new form of capital—“emotion capital.” It has no financial statements, only cultural symbols; no company fundamentals, only consensus curves; it doesn’t pursue rational returns, only emotional release.

When algorithms fail, emotion becomes currency

The data is in front of us: in the first nine months of 2025, 90% of top Meme coins’ market caps collapsed; in the second quarter, 65% of new tokens lost over 90% of their value within six months. It’s like a gold rush in the digital age—most prospectors end up empty-handed, only those selling shovels make a profit.

But here’s the core issue: when money starts telling stories, the underlying logic of global finance is being fundamentally rewritten.

In traditional markets, prices reflect value. In crypto markets, prices create value.

This is both the ultimate expression of decentralization and possibly the limit of abdication of responsibility. When narratives replace cash flows, and emotion becomes an asset, each of us becomes a guinea pig in this experiment. No one knows what will happen in the end.

Where is the way out?

The Web3 industry stands at a crossroads. Should it continue to indulge in the short-term狂欢 of “emotion capitalism,” or move toward long-term construction of a “value-driven ecosystem”?

The real way out requires three things: strengthen community governance, establish more transparent industry rules, and introduce investor education mechanisms. Only then can decentralized technology truly empower financial fairness rather than becoming tools for harvesting retail investors.

Next time you see a KOL wildly promoting “hundredfold coins,” ask yourself calmly: Am I participating in financial innovation, or am I paying for someone else’s wealth freedom?

When money starts telling stories, what’s most needed isn’t FOMO (fear of missing out), but the ability to think calmly.