The Meme Coin Frenzy: When Sentiment Becomes an Asset, We're All Paying the Price

This holiday, the crypto world was not resting.

In the ecosystem of a certain leading exchange, several obscure Meme coins saw their market caps skyrocket by dozens of times within days—tokens like Meme4, PALU suddenly became popular, allowing early participants to easily realize gains of over a million dollars. The community exploded with excitement, various KOLs cheered and celebrated as if they had discovered a new gold mine.

But the celebration didn’t last long. The market turned around, these tokens plummeted in free fall, with single-day drops of up to 95%, over 100,000 traders were liquidated, and total losses reached $621 million.

The dream of overnight wealth turned into huge losses on accounts in the blink of an eye.

What is behind the madness?

This scene can be seen in any market, just in different forms. Retail investors gather to push small-cap assets to surge, then quickly exit at the peak, with latecomers becoming the bagholders—this is almost an eternal rule of financial markets.

If this Meme coin craze happened in mainstream financial markets, the story would be quite compelling. Media would discuss the “victory of retail capitalism,” related institutions would launch various derivatives, and academia would incorporate it into “behavioral finance” studies. Regulatory authorities might say: as long as information is sufficient and transactions are genuine, bubbles are part of market evolution.

But Meme coins are different. They do not belong to any country’s securities regulation scope, nor are they within traditional finance frameworks. They exist in a gray area, self-organized by code, liquidity, and consensus.

The core issue: emotions are replacing value

In this lawless land, some fundamental things are beginning to change:

Exchanges are no longer neutral—they actively create narratives, promote new coins, becoming storymakers.

KOLs become price amplifiers—their recommendations can instantly ignite hype or evaporate just as quickly.

Retail investors reinforce themselves through algorithmic cycles—seeing others profit, fearing missing out (FOMO), they rush in, then collectively flee.

The most critical change is: Prices are no longer determined by cash flow and fundamentals, but by the speed of narrative and the density of consensus. We are witnessing the birth of a new form of capital—one without financial statements, only cultural symbols; no company fundamentals, only consensus curves; not seeking rational returns, but emotional release.

Numbers don’t lie

A quick look at the data reveals the reality: in the first nine months of 2025, 90% of top Meme coins’ market caps have collapsed; in Q2, 65% of new coins lost over 90% of their value within six months. It’s like a gold rush in the digital age—most prospectors lose everything, only those selling tools profit.

What does this tell us? When money starts telling stories instead of reflecting value, the logic of global finance is being rewritten.

Traditional markets: prices reflect value.
Crypto markets: prices create value.

This is the ultimate expression of decentralization, but it may also be the bottom line of abdication of responsibility. When consensus replaces cash flow, when emotion becomes an asset, every participant is a guinea pig in this experiment.

Where is the way out?

The Web3 industry stands at a crossroads. Should it continue indulging in short-term emotional frenzy, or shift toward long-term value building?

The real answer requires: strengthening community governance, establishing transparent operational rules, and improving investor education mechanisms. Only then can decentralized technology become a tool for inclusive finance, rather than a weapon for a few to harvest profits.

Next time you see someone wildly promoting a “hundredfold coin,” ask yourself: Am I participating in financial innovation, or am I paying for someone else’s wealth freedom? In this era of flying stories, the most valuable skill is not chasing the wind, but thinking calmly.