Meme Coin Speculation Nature and Investor Risk Guide

Event Review: Unconventional Wealth Cases

At the beginning of 2023, trader “DMT.eth” purchased 59 trillion PEPE tokens for approximately 263 RMB. Their success stemmed from betting on two unconventional factors:

1. Counter-Cyclical Layout: Choosing minimal cultural symbols during a phase when the market generally denies Meme coins;

2. Emotional Expectation Modeling: Anticipating that frog memes would trigger viral spread on social media (driven by FOMO mechanisms).

The Multi-Dimensional Drivers and Structural Risks Behind the Surge

• Derivative Fuel: Mainstream exchanges launched high-leverage contracts (such as 100x), with daily clearing amounts exceeding $380 million;

• Chip Concentration Warning: The top 100 addresses hold 35% of the positions, posing obvious control and liquidity attack risks;

• Irrational Participant Groups: Some Gen Z investors regard it as a tool for class leap, with notable instances of borrowing to invest everything.

The Harsh Reality of the Meme Coin Market

• Industry data indicates that nearly 80% of Meme tokens face a zero value within 3 months of launch, and PEPE once dropped by 50% in a single day due to market rumors;

• Continued regulatory pressure (such as SEC investigations and trading bans in South Korea) has caused its market value to shrink by 70%;

• Professional institutions characterize such assets as: “Purely emotional gambling tools, lacking fundamental support.”

Survival Rules for Rational Investors

1. Cognitive Reset: Understand the extreme randomness of wealth cases; statistics show that 78% of holders sell within 9 days.

2. Anti-FOMO Strategy: When the general public begins to discuss it (such as the “Aunt Indicator”), it often signals a liquidity turning point.

3. Risk Exposure Control: Single Meme coin allocation strictly ≤ 5% of total investment portfolio to withstand high volatility shocks.

4. Regulatory Sensitivity: Continuously monitor policy dynamics in major jurisdictions to prevent systemic risks.

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