DOGE. PEPE. AI altcoins. Periodically, a memecoin skyrockets in value, leaving many wondering how these phenomena occur. We spoke with top executives at cryptocurrency exchange BTSE to uncover the mechanics behind these trends. CEO Henry Liu and COO Jeff Apricot shared their expert perspectives on the hype and desire driving market emotions across crypto, commodities, and traditional fiat currencies. TLDR – Henry and Jeff believe 'retailization' represents a significant asset for the cryptocurrency industry, offering insights from BTSE's recent FUD & FOMO report.
Q: To begin, you've frequently mentioned that 'Retailization' is here to stay. Could you elaborate on what this means?
Henry:
Certainly. We've consistently maintained that retail adoption of cryptocurrencies and the broader Web3 ecosystem represents a significant asset. 'Retailization' refers to the growing mainstream usage of crypto by everyday consumers, indicating Web3's increasing integration into conventional markets. Despite the industry facing considerable challenges along the way – without needing to name specific cases – we haven't observed any fundamental shift in this trajectory. Perhaps just a temporary delay until we witness cryptocurrencies seamlessly integrated into daily life worldwide.
Jeff:
Exactly. Even though critics became more vocal during this recent crypto cycle, capturing significant media attention, we've seen their perspective completely overturned by the FOMO rallies surrounding PEPE and AI altcoins. There will always be this FUD & FOMO cycle in cryptocurrency markets – Fear, Uncertainty, and Doubt drives the downturns, while Fear Of Missing Out typically fuels the upswings. In traditional finance, they call this the fear and greed index. Overall, however, we're seeing an upward trend in adoption. These memecoin rallies consistently remind us that there are still plenty of growth opportunities ahead. We published a report analyzing these FUD and FOMO dynamics, exploring the underlying mechanisms.
Q: Perhaps we can examine the PEPE hype as an example. How did this particular token gain such traction so suddenly?
Henry:
The capital flowing into the PEPE phenomenon is deeply rooted in retail trading activity, much of which is driven by online communities and consensus. Pepe itself is an internet meme that has enjoyed tremendous popularity across the web for years. It has acquired various meanings across different cultures and regions. This project essentially taps into that existing fanbase, offering an engaging, almost whimsical way for people to participate in the broader community.
Jeff:
Yes, we should note that the PEPE project website states it was launched 'for the people' with 'no formal team or roadmap' and is 'for entertainment purposes only.' While this disclaimer serves as legal protection, it also accurately reflects the project's nature. You can view this entire hype cycle as a social and cultural movement emerging from the digital age's unique combination of technology, social media, and a collective desire to participate in something larger. It's actually fascinating to observe.
Henry:
Exactly, and this reinforces our point that retail crypto adoption remains an unstoppable trend, regardless of what traditional finance commentators might say. The enthusiasm around PEPE demonstrates that retailization is here to stay, albeit with considerable volatility. Moreover, PEPE's availability on major centralized exchanges has significantly contributed to its price surge, as this provides retail investors with access to these tokens. We also listed it on our exchange, partly as a 'power to the people' gesture. We aim to offer both institutional and retail investors access to the coins they want to trade, supported by professional-grade trading tools.
Q: What's your overall perspective on memecoins? Aren't they potentially damaging to the Web3 industry's reputation?
Henry:
We must be clear that memecoins represent an extremely speculative and volatile category of crypto tokens. They lack practical utility compared to more established tokens like ETH (Ethereum) or SOL (Solana), where tokens are designed to power broader ecosystems. Meanwhile, BTC is primarily viewed as a store of value or means of payment, with a much longer track record, and its network is fully decentralized, which may not be the case with many memecoin projects.
Jeff:
I'd add that speculation has always been part of human nature, and the potential for profit is a powerful motivator that keeps our economy moving. Therefore, speculation itself isn't inherently problematic – we simply need to approach these types of tokens with the right mindset. At its peak, Dogecoin had a market capitalization exceeding $80 billion, making it more valuable than many established traditional companies – that makes it a tremendous cultural force. However, unlike Apple's stock, which derives value from products people use daily, memecoins don't rely on any intrinsic value.
Henry:
So we must acknowledge that this inherent volatility of memecoins can lead to investors losing significant portions of their investments. That said, there is potential for these tokens to integrate into the DeFi ecosystem. Some memecoins have already begun this transformation. For instance, Shiba Inu (SHIB), another dog-themed memecoin, launched ShibaSwap, its own decentralized exchange, providing additional utility and value for its holders.
Q: Do you believe this memecoin trend can last?
Henry:
It's difficult to predict. Memecoins first exploded into mainstream consciousness during 2021's 'Wall Street Bets' movement, a Reddit-driven community phenomenon. So in terms of the timeline of modern market movements, we're still in the early stages of this trend. But as with any trend in the fast-paced world of cryptocurrencies, the future of memecoins remains uncertain.
Jeff:
I think they could continue to grow in popularity and influence. So far, memecoins appear to be an integral part of the crypto landscape. Trends do come and go though, and everything moves faster in the digital age, so we'll have to wait and see. At the very least, it'll be entertaining to watch.
Q: Any advice for those looking to invest in memecoins?
Henry:
Be cautious out there. Recognize the risk of 'pump-and-dump' schemes. That's when the hype around a memecoin is artificially inflated, often by coordinated groups or influential individuals (whales), only to be sold off once the hype peaks. This leads to a sharp decline in value and significant losses for those who bought in during the hype surge.
Jeff:
Emotional discipline is incredibly important for success in crypto trading. Understand the psychological forces of FUD and FOMO, and don't let them drive your decisions. There are technologies like algorithmic trading systems and robo-advisors available that could help avoid impulsive actions driven by FUD and FOMO. Again, I'll point to that FUD & FOMO report we published recently – it's essential reading.
Henry:
It is. We summarize several key trading practices to adopt: always be aware that you trade at your own risk. Maintain a long-term perspective. Develop a well-researched trading strategy. Explore risk management techniques, and set realistic goals. And one of the most important ones: learn to distinguish between fact-based information and social media hype. Remember, if you're not a professional, don't invest more than you're willing to lose. Though, with memecoins, even professionals can get caught off guard.
Disclaimer: BTSE is an investor in CryptoSlate.
