1️⃣ A few days ago, the highly popular Bearchain launched its tokens. As an ambitious project aimed at revolutionizing the old public chain system, it claims to inherit the legacy of Ethereum as an L1 public chain, achieving breakthrough innovations in technology and attracting a large number of technical talents to join the ecosystem's development. It has also fostered a good community atmosphere. In the current downturn of Ethereum's overall trend, Bearchain's TGE event is undoubtedly a bright spot, carrying the hopes of many loyal ETH fans.
2️⃣ Thus, many friends around me bought a lot after Bearchain's listing. Bearchain did not disappoint and reached a peak price of $15. Considering its total issuance of 500 million and a circulating supply of only 100 million, a price of $15 and such a market cap is relatively reasonable. As long as the project team manages the operations and unlocks in an orderly manner, such a large IP should be stable.
As shown in the figure, Bearchain's current market price is $5.8. In just a few days, it has dropped by 61.3% from its peak. If you are optimistic about Bearchain's future price and got in around $15, you could say that it's a significant loss!
3️⃣ If this price is due to a large sell-off by airdrop beneficiaries, based on my observations in various groups, many accounts that participated in testnets received zero airdrops. Out of 200 accounts I tested, very few won. The ones that received more are probably various NFT holders. But considering the liquidity, the price dropped so quickly, it’s still unreasonable.
4️⃣ So what is the root cause? Yes, the VCs hold too many tokens. What is a VC? In traditional finance, it is called a venture capital institution or investment bank. In the crypto field, it is called VC. At the beginning of a project, there is often no funding and no substantial team, but there may be a good IP concept. To get started, a large amount of funding is needed. What to do? Borrow! Thus, after listening to the project team’s detailed explanation, VC giants assess the future market and purchase a portion of the future total token supply at a very low price; this is VC financing.
5️⃣ So, why did I buy so much? For long-term development? There are such investors, but most will take profits because many VCs act merely as investment managers who need to show profits to major shareholders, so they sell. Although some project teams may implement phased unlocking plans, VCs still hold a lot.
6️⃣ No matter how good the project or how large the pie, retail investors in the secondary market cannot absorb it, where is the liquidity? Most VC-held tokens are left with only selling pressure as soon as they launch.
7️⃣ Speaking of memes, in the early days of this market, many meme coins existed merely as cultural memes. Later, they evolved into extensions of various social hotspots and deep cultural aspects between the East and West in the blockchain world. Coupled with insufficient liquidity on-chain, there was a massive wealth effect, leading to the emergence of a new term—‘Doge’!
8️⃣ In January 2024, pump.fun officially launched on the Solana chain, marking the beginning of a new era in meme coin gameplay. All tokens issued on the pump.fun platform are divided into internal and external markets. Once the internal market issues reach 100%, they will be launched into the external market, with all token contract addresses ending with 'pump', completely eliminating rogue practices like PiXiu, no locked liquidity, and modifying total token supply.
9️⃣ By around November 2024, a new concept, AI agent, quietly emerged. From the initial AI16z to various agent projects starting to surge, many people obtained large amounts of tokens in the early stages of these projects, even in the fortunate internal markets, leading to direct financial freedom. This signifies that the meme market, as an alternative channel for launching new projects, is now viable. Compared to VC financing, it has a larger community base, which can gradually form a consensus for long-term development and reduce selling pressure. For retail investors, they can also obtain tokens at lower prices through research efforts, creating a win-win situation.
🔟 Currently, the biggest problem to solve in meme as a new financing channel for projects is the large number of junk projects. The descriptions on Twitter are often exaggerated, primarily aimed at harvesting retail investors. After you get on board, they directly dump their tokens on you. Only less than 1% of the projects genuinely develop, but they test investment research capabilities heavily; often by the time they gain fame, token prices are already high.
Overall, I still have confidence in the future of the meme market and remain steadfast!
