What Is the Memecoin Supercycle and the Explosive Growth of Memecoins

What Is the Memecoin Supercycle?

The memecoin supercycle is a phenomenon where memecoins outperform every other sector in crypto, because of their speculative nature with the potential for astronomical returns, community support, and internet virality. 

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Key Takeaways

• The memecoin supercycle is driven by viral internet culture, community enthusiasm, and speculative hype.

• Classic memecoins like Dogecoin and Shiba Inu averaged a 105% growth in 2024, while newer coins like PNUT delivered over 1,900% returns.

• Retail traders are drawn to memecoins due to their simplicity, strong community engagement, and high liquidity, which makes them accessible to those less familiar with crypto's technical aspects.

• Murad Mahmudov (@musstopmurad on X) predicts the memecoin market could surpass a $1 trillion market cap.

• Solana's developer-friendly ecosystem is fueling a surge in memecoin activity, with day trading volume hitting $10 billion on November 13, 2024.

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The total market cap of memecoins reached a high of around $90 billion in May 2021, but it dropped drastically below $15 billion within the next year, leading many to label it a bubble. However, after consolidating for over two years, the memecoin market cap started to surge in March 2024, eventually crossing the all-time highs in November 2024.

Moreover, the number of memecoins with over $1 billion market cap increased to ten at time of writing, with Peanut the Squirrel (PNUT) marking a significant milestone. PNUT was valued at around $100 million on November 11, 2024, and surpassed a valuation of $2 billion in three days, making a staggering 1,900% surge.

So, is this the beginning of the memecoin supercycle, or just another temporary spike? We'll explore this further in this article.

Enter The Memecoin Supercycle

A memecoin supercycle typically leads to an extremely bullish market, with skyrocketing prices and substantial growth in the sector's overall market cap.

Unlike traditional financial markets, like stock markets, where fundamentals and earnings drive value, a memecoin supercycle is purely based on viral internet culture and supported by a strong, engaged community.

Fueled by fast changing online trends, social media influence, and hype, memecoins can gain momentum quickly, pushing prices and market cap to new highs in a short period. However, the value in a memecoin supercycle is purely speculative, relying more on collective enthusiasm than on tangible assets or intrinsic value.

For instance, it's mostly during this supercycle that crypto projects with lower valuations and minimal utility suddenly move up the ladder, finding their place in top memecoin lists. It's not surprising that a memecoin project valued at a few thousand dollars surpasses millions or even hundreds of millions in valuation within a span of a few days.

Murad's Memecoin Supercycle Theory Is Converting Skeptics Into Believers

Murad Mahmudov is a popular memecoin advocate and crypto analyst who shares his thoughts and analysis through his X account. According to Mahmudov's memecoin supercycle theory, the memecoin market is in its early stage and has the potential to surpass the $1 trillion market cap.

This cycle’s main narrative is Memecoins.

To the majority this still sounds crazy.

To those paying attention, this is obvious. pic.twitter.com/X0Vbodv9Pf

— Murad 💹🧲 (@MustStopMurad) October 28, 2024

After Murad's speech at the TOKEN2049 conference in September 2024 on the memecoin supercycle, excitement surged and created a buzz in the crypto community. The detailed memecoin market analysis, insights, past performance, and other relevant factors that support the potential of the supercycle captivated the memecoin community.

Some major takeaways from his speech involve the following.

1. Meme Coin Supercycle Is Already Happening 

Murad's speech begins by strongly emphasizing that the memecoin supercycle is not a prediction about the future but something that's already happening. To illustrate this point, he highlights the year-to-date growth of various major sectors in the crypto space.

The average performance of crypto giants like BTC, ETH, and SOL showed a growth of 22%, while Layer 1, modular, and Ethereum DeFi tokens performed poorly with -10%, -59%, and -14%, respectively. Similarly, Solana DeFi and AI/DePIN could only manage growth rates of 6% and 3%, respectively.

Further solidifying his arguments, older memecoins, including Dogecoin, Shiba Inu, and others, achieved an average growth of 105% during the same period. Meanwhile, newer memecoins, like Pepe (PEPE) and Peanut the Squirrel (PNUT), averaged over 2000% in returns.

2. Supercycle Theory Is Converting Crypto Retail Investors Into Meme Coin Believers

The crypto token market is heavily dependent on its retail traders and investors, with a major portion of retail investors uninterested in the complex technological aspects. Here, Murad mentions that most retailers don't care about the blockchain being slightly faster, or more private, or about complex concepts such as zk-SNARKs.

The memecoin is a simple concept that helps new or non-tech-savvy investors start or expand their crypto investing journey. Here, memecoins follow a "token itself is a product" philosophy, such that they represent and promote the token directly without focusing on actual utility and marketing the underlying technology.

3. Token Over Production and High Valuation Altcoins Listing 

The crypto market is witnessing an overproduction of tokens as the technical complexities of minting tokens have decreased with time. For example, as of April 2024, over 600,000 new tokens were launched, averaging over 5,500 new tokens daily.

The token founders, investors, and team members get early access to the token at a low price, while normal people get access to these tokens at inflated valuations from exchanges following their listing. Here, retail is the exit liquidity where individual investors get trapped after their investments.

For instance, out of the tokens, including utility tokens listed on Binance in 2024, only one showed positive returns, whereas 29 others lost value, with some dropping as high as almost 90%.

According to Murad, only 43 of the top 300 tokens have outperformed BTC in 2024 year-to-date. Of these, 13 of the top 20 tokens are from the memecoin category.

Even though memecoins are a significant contributor to the overproduction of tokens through the launch of memecoin generating platforms like Pump.fun, these platforms also guarantee a fair launch. Token creators cannot pre-allocate a large portion of their token supply to themselves; instead, they must purchase the tokens alongside other buyers, which creates a fairer, more transparent starting point for traders. 

4. Converting Crypto Non-Believers to Memecoin Ecosystem

More than a way to create wealth, memecoins are also a form of entertainment that helps people express their identity and a sense of belonging to a community. These connections are strengthened by the core story and its underlying narrative that resonates with shared values, humor, and collective goals.

Other major elements that pull even crypto non-believers into memecoin participation include its simplicity compared to tech-based altcoins, high liquidity compared to NFTs, passionate and engaging community, and more.

Murad’s List of Memecoins to Watch

Murad has specifically discounted older coins like Dogecoin and Shiba Inu, focusing instead on newer, low-cap coins with strong, engaged communities. In his podcasts, Murad has also mentioned that he favors memecoins that have been around for at least a few months for the community to gather cult-like traction. 

In late November, he released a list of 10 memecoins that he believes are worth holding into 2025.

These are my TOP 10 CRYPTO PICKS for 2025.

These are worth BUYING & HOLDING for the coming year.

Stop TRADING and BELIEVE in SOMETHING. pic.twitter.com/ZYbQKvDsxd

— Murad 💹🧲 (@MustStopMurad) November 20, 2024

SPX6900 (SPX)

Chain: Ethereum

Contract Address: 0xe0f63a424a4439cbe457d80e4f4b51ad25b2c56c

Chain: Base

Contract Address: 0x50da645f148798f68ef2d7db7c1cb22a6819bb2c

Chain: Solana

Contract: J3NKxxXZcnNiMjKw9hYb2K4LUxgwB6t1FtPtQVsv3KFr

Aimed at flipping the stock market, it's considered the #1 movement coin with a goal to reach a $69 trillion market cap and is known for its strong community belief and purpose. While originally on Ethereum, SPX6900 has been bridged to other chains like Base and Solana that offer lower transaction fees.

GigaChad (GIGA)

Chain: Solana

Contract Address: 63LfDmNb3MQ8mw9MtZ2To9bEA2M71kZUUGq5tiJxcqj9

GigaChad is inspired by the internet meme of the same name, which features a hyper-masculine and idealized male figure, often used to represent peak physical and mental conditioning. GigaChad positions itself more as a cultural phenomenon or a "movement coin."

Mog Coin (MOG)

Chain: Ethereum

Contract Address: 0xaaee1a9723aadb7afa2810263653a34ba2c21c7a

Chain: Base

Contract: 0x2da56acb9ea78330f947bd57c54119debda7af71

Noted for its cultural appeal, it's friendly to newcomers while still resonating with the crypto community. Its community has strong cult-like qualities, reminiscent of early Shiba Inu vibes. It also recently crossed the $1 billion market cap threshold. While originally on Ethereum, MOG has been bridged to Base, which offers lower transaction fees. 

Apu Apustaja (APU)

Chain: Ethereum

Contract Address: 0x594daad7d77592a2b97b725a7ad59d7e188b5bfa

The memecoin is inspired by a Finnish frog meme. It emphasizes community spirit, creativity, and inclusiveness, with initiatives like music albums, games, and billboards for visibility. Despite an initial attempted rug pull, the community's dedication has led to a significant market presence.

Popcat (POPCAT)

Chain: Solana

Contract Address: 7GCihgDB8fe6KNjn2MYtkzZcRjQy3t9GHdC8uHYmW2hr

Inspired by the Popcat internet meme, it has gained traction for its cute and viral appeal, making it popular among cat lovers and crypto enthusiasts.

HarryPotterObamaSonic10Inu (BITCOIN)

Chain: Ethereum

Contract Address: 0x72e4f9f808c49a2a61de9c5896298920dc4eeea9

Chain: Base

Contract: 0x2a06a17cbc6d0032cac2c6696da90f29d39a1a29

Chain: Solana

Contract: CTgiaZUK12kCcB8sosn4Nt2NZtzLgtPqDwyQyr2syATC

Combines themes from Harry Potter, Barack Obama, Sonic, and memes. It has no practical utility, focusing on community and meme culture, with a market cap in the millions, showcasing its popularity despite its whimsical nature. Like SPX 6900, it was originally on Ethereum, but has been bridged to other chains like Base and Solana, which offer lower transaction fees. 

Lock In (LOCKIN)

Chain: Solana

Contract Address: 8Ki8DpuWNxu9VsS3kQbarsCWMcFGWkzzA8pUPto9zBd5

A Solana-based memecoin inspired by the "lock in" meme, symbolizing commitment and focus. It appeals to those who resonate with the concept of dedication in gaming and life.

Retardio (RETARDIO)

Chain: Solana

Contract Address: 6ogzHhzdrQr9Pgv6hZ2MNze7UrzBMAFyBBWUYp1Fhitx

Built on Solana, it promotes themes of courage and community bonding, with a strong, active community of over 23,000 holders.

Mini (MINI)

Chain: Solana

Contract Address: 2JcXacFwt9mVAwBQ5nZkYwCyXQkRcdsYrDXn6hj22SbP

As a smaller cap coin, Mini taps into the meme cycle's focus on cats. It has gained considerable media attention and is favored for its potential to grow significantly due to its niche in the meme ecosystem.

American Coin (USA)

Chain: Solana

Contract Address: 69kdRLyP5DTRkpHraaSZAQbWmAwzF9guKjZfzMXzcbAs

This coin could see growth due to upcoming events like elections, leveraging national pride and political interest. It's noted for having some of the wealthiest coin holders by far.

History of Meme Coin Supercycles

Supercycles are not new. The industry witnessed multiple supercycles in the past — the only difference now is that many more are aware of the phenomenon and have the opportunity to act early.

First Supercycle

The first memecoin supercycle was single-handedly driven by Dogecoin, the pioneer of the memecoin world, between early 2017 and 2018. During this first supercycle, the price of Dogecoin surged from around $0.00020 in February 2017 to a peak of $0.0175 in January 2018. 

During this cycle, Dogecoin surged around 8,7000% within a year, showing the strength of the underestimated memecoin sector in the crypto space. During this period, the total crypto market cap also surged from around $18 billion to over $850 billion, a nearly 50-fold increase.

During this first memecoin supercycle, Dogecoin's market cap surged from $23 million in February 2017 to surpass the milestone of $1 billion by the end of December 2017, reaching a peak of $1.98 billion on January 7, 2018.

Second Supercycle

The first memecoin supercycle was a modest wave compared to the massive second one that occurred between 2020 and 2021, fueled by the pandemic-driven surge in retail trading. In this cycle, too, Dogecoin led the initial rally, soaring from around $0.005540 in January 2021 to $0.6818 in May 2021, marking a massive 12,200% price surge within just four months.

Celebrity endorsements played a prominent role in this supercycle, with tech icons like Elon Musk supporting and promoting Dogecoin through his X posts. During this cycle, Dogecoin's market cap surged from around $1.2 billion in January 2021 to peaking over $88 billion in May 2021.

During this cycle, other memecoins, like Dogecoin's competitor Shiba Inu, emerged from $0.000000000080 in January 2021 to a peak of $0.000081 in October 2021, resulting in a return of around 101250000% for their early holders. 

Floki is another popular memecoin that surged along with Shiba Inu during the second cycle. However, this second meme supercycle, fueled by multiple memecoins, started to decline in November 2021 and ended within a month following the onset of the crypto winter.

Third Supercycle

After consolidating during the crypto winter, the third memecoin supercycle started to show some strength towards the end of 2023, confirming the beginning of the cycle around March 2024. For instance, the memecoin market cap surged from around $20 billion in January 2024 to surpass $110 billion in November 2024, over a fivefold jump.

Unlike the first and second cycles, in this third cycle, numerous memecoins helped drive up the market cap. Some notable ones include dogwifhat, Bonk, Peanut the Squirrel, Popcat, Brett, and many others, all of which found their place in the top 100 crypto tokens based on their market cap.

Even the big names in the memecoin space, like Dogecoin, Shiba Inu, Pepe Coin, and Floki, registered year-to-date gains of over 350%, 165%, 1595%, and 515%, respectively, in November 2024.

Solana's Role in Memecoin Supercycle

The high transaction speed, low fees, developer-friendly approach, and growing ecosystem have attracted developers to mint memecoins on Solana over the past few years. This blockchain has also helped users mint memecoins using no-code platforms like Pump.fun, Coin Factory, and many others.

According to CoinGecko's crypto industry report for Q3, 2024, Solana memecoins, memecoins, and AI were that quarter's most popular narratives, capturing the interest of over one-third of the investors. 

Based on this report, memecoins and Solana memecoins combined shared around 28% of CoinGecko's category web traffic in Q3, 2024. During this period, other popular categories such as DeFi, DePIN, and the Ethereum ecosystem only accounted for 1.37%, 2.40%, and 1.94%, respectively, highlighting the memecoin dominance and Solana's growing prominence.

The success narrative of billion-dollar market cap Solana memecoins like Dogwifhat, Bonk, Peanut the Squirrel, and Popcat has significantly contributed to the platform's rise. With memecoins valued at over $20 billion, Solana has cemented its role in driving this third memecoin supercycle.

Who Will Benefit From The Memecoin Supercycle?

Let's take a look at the likely impact of the memecoin supercycle.

Crypto Traders

Trending markets are golden opportunities that short-term crypto traders don't want to miss, as the profit potential is high during these cycles. Different types of traders, including scalpers, intraday, swing, or positional traders, can utilize this opportunity for rapid gains.

The high liquidity during a supercycle also benefits many traders, especially those placing high-frequency trading strategies, allowing them to enter and exit the market with minimal price slippage.

Early Investors

Early investors who observe the market, analyze potential memecoins, and place their investments even before their hype cycle begins can maximize their returns significantly. Here, the strategy is to identify promising projects early so that once market trends pick up, these investors don't need to worry about sell-offs at higher prices.

Investors can also choose certain themes in memecoins, like dog-themed or meme trends with high social media traction, to allocate their funds toward projects they find likely to capture public interest and drive hype.

Founders and Team Members

Memecoin founders and core team have one of the highest stakes and incentives to benefit from the success of their memecoins. Along with the significant gains from the price surge, they can also gain influence and support from the community that fuels ongoing growth.

With this backing and momentum, they can continue to expand their existing memecoin ecosystem or venture into new sectors in the crypto space.

What To Do During The Memecoin Supercycle?

Here are some tips on how to navigate the memecoin supercycle.

Do Your Own Research

During a memecoin supercycle, social media platforms will be flooded with hundreds of memecoins competing for attention and promising massive returns. Celebrities and influencers will be in high demand for paid promotions of trending or newly launched memecoins.

It's best to conduct due diligence to find the details of the memecoins, their founding team (if available), whitepaper, official websites, social media accounts, and community activities before investing or trading. Also, users should beware of copycat memecoins that bear similar names to successful memecoins. To avoid this, users can search for the token address of the memecoin they wish to buy instead of searching by token name. 

Diversify Your Portfolio

Diversification, or simply not putting all eggs in one basket, has become a cliché, but it remains a critical strategy for risk management even when it comes to memecoins. In worst-case scenarios, such as with pump-and-dump projects, diversification helps prevent the complete loss of investment from a single failed memecoin.

This investment or trading approach balances potential rewards with risk control, giving investors a better chance of retaining some value even if one or more memecoins perform poorly.

For example, you may choose to buy a mix of established memecoins that have weathered multiple cycles, like DOGE, SHIB, and PEPE, along with more trendy memecoins like PNUT and NEIRO. You can also opt to further diversify your portfolio by buying stalwarts like BTC, ETH, or SOL.

Trade Or Invest With Caution

Crypto markets are highly volatile, and when it comes to memecoins, their price swings are extreme, with drops or surges of 40% or more within minutes not uncommon. Ensure that the memecoin being traded has a sufficient market cap and trading volume to help avoid rapid, high losses.

One important trading or investment guideline for memecoins is to invest only in what one can afford to lose and is comfortable parting with.

Conclusion

The strong rally in memecoin pricing and the creation of a new all-time market cap indicate the ongoing supercycle. The increased trading volumes and social media hype also justify this, signaling a continued surge in interest and momentum.

Memecoin supercycles have helped many achieve substantial short-term gains, but caution is necessary as the speculative nature of these markets can lead to extreme volatility. Proper research, diversification, and risk management are essential to benefit from these unpredictable cycles.

This article is only for informational and educational purposes and should not be taken as financial advice. Always do your own research before engaging with any protocol.