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“Memecoins have extra potential upside than blue-chip governance tokens, in keeping with VC.”
Catchy headline proper? Memecoins outperforming blue-chips? (Spectacular!).
Sadly, that is only a properly disguised (and extensively deceptive) ‘water is moist’ kinda assertion.
It’s a trick we regularly fell for (for longer than we’d prefer to admit) once we first began exploring crypto — so we figured we’d allow you to in on the way it’s finished, in case you’re in the identical boat.
The trick works like this:
Sure, memecoins have extra potential upside than blue-chip governance tokens — however…
The decrease the full worth of a cryptocurrency → the much less funding is required to push it up in worth → the larger its ‘potential upside.’
That’s the essential gist ☝️
Now, right here’s some real-world context for you:
The memecoin darling of this bull run, dogwifhat ($WIF) has a complete market worth of round $2.5B proper now, whereas Bitcoin is price round $1.24T.
Yesterday morning, Bitcoin went from $61.78k to $63.1k, rising its whole worth as an asset by ~$20B within the course of.
In the event you had have purchased BTC at $61.78k and offered at $63.1k, you’d’ve made a few ~2% return in your cash.
Had that very same $20B of worth been added to $WIF’s $2.5B market worth, holders would have seen a tidy 700% return.
(Not unhealthy for a Tuesday morning).
“$WIF has a larger potential upside than Bitcoin!”
See how that makes for a catchy headline, however is a extensively deceptive ‘water is moist’ kinda assertion?
Determining which of the 2000+ memecoin initiatives launched each-and-every day are really going to run up in worth?
Now that’s the onerous half.