Industry Structure Differentiation and the Meme Coin Craze: An Analysis from a VC Perspective

In the current cryptocurrency market, the popularity of Meme coins is striking. As a partner in a evergreen fund, we are not anxious about this; rather, we anticipated this situation as early as the beginning of the year. Our unique advantage lies in our ability to view industry development from a long-term perspective, unaffected by external funding and fundraising pressures.

Structural Changes in the Industry

The cryptocurrency industry is undergoing a significant polarization trend. On one hand, traditional finance is incorporating a large amount of crypto assets into the Wall Street system through compliant tools like ETFs; on the other hand, the further compression of the attention economy has made directly speculating on Meme coins the most primitive form of cryptocurrency operation. This polarization is leading to an increasing shrinkage of the middle ground in the industry, with offshore exchanges, market makers, crypto financial service providers, and venture capital institutions all facing challenges.

The Dilemma of VC Token

The current negative sentiment in the market towards VC Token stems from issues in the industry's liquidity supply chain. Unlike successful cases like Solana, many VC Tokens complete their token generation events before their products are launched, resulting in a fragmented community and insufficient buying interest. The high valuation at launch, coupled with a lack of buying support, inevitably leads to a price decline.

The Rise of Meme Coins

In this context, Meme coin has become an opportunity in the track that cannot be ignored. It is not only a speculative tool but also a cultural carrier that embodies collective consciousness, emotions, and identity. The product core of Meme coin is the ideologies and narratives it carries, and its potential depends on the influence of these ideologies. Compared to VC Token, Meme coin has advantages in the integration of product communities and trading communities.

The Sustainability of the Meme Craze

Despite the vibrant Meme coin market, investors still need to be vigilant. When the market experiences inflated confidence and unrealistic expectations, the risks also increase. Once the industry lacks greater liquidity opportunities, or Bitcoin encounters resistance, this high-risk Alpha could quickly decline.

The Power of Market Cycles

The changes in the listing strategy of exchanges will guide the market direction, while the low threshold asset issuance characteristics in the industry may lead to homogeneous competition. In this case, the market will ultimately return to rationality, eliminating those projects that lack substance.

In the long run, the market will oscillate between long-termism construction and short-termism sentiment. Mainstream projects and Meme coins will form the two ends of the investment spectrum, rising and falling with market sentiment.

As an investor, the key is to find a rhythm that suits you, make judgments based on understanding, learn from mistakes, and maintain curiosity and a sense of awe.