TL;DR
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“Memecoins have more potential upside than blue-chip governance tokens, according to VC.”
Catchy headline right? Memecoins outperforming blue-chips? (Impressive!).
Unfortunately, this is just a well disguised (and widely misleading) ‘water is wet’ kinda statement.
It’s a trick we often fell for (for longer than we’d like to admit) when we first started exploring crypto — so we figured we’d let you in on how it’s done, in case you’re in the same boat.
The trick works like this:
Yes, memecoins have more potential upside than blue-chip governance tokens — but…
The lower the total value of a cryptocurrency → the less investment is needed to push it up in price → the greater its ‘potential upside.’
That’s the basic gist ☝️
Now, here’s some real-world context for you:
The memecoin darling of this bull run, dogwifhat ($WIF) has a total market value of around $2.5B right now, while Bitcoin is worth around $1.24T.
Yesterday morning, Bitcoin went from $61.78k to $63.1k, increasing its total value as an asset by ~$20B in the process.
If you had have bought BTC at $61.78k and sold at $63.1k, you would’ve made about a ~2% return on your money.
Had that same $20B of value been added to $WIF’s $2.5B market value, holders would have seen a tidy 700% return.
(Not bad for a Tuesday morning).
“$WIF has a greater potential upside than Bitcoin!”
See how that makes for a catchy headline, but is a widely misleading ‘water is wet’ kinda statement?
Figuring out which of the 2000+ memecoin projects launched each-and-every day are actually going to run up in price?
Now that’s the hard part.
