AI Memecoin: The Beginning of a New Wave of Crypto Assets

In the first quarter of 2024, the total circulating market value of the top ten AI technology tokens reached 30.9 billion USD. In contrast, although the top ten AI meme coins have garnered more attention, their total market value is only 2.54 billion USD. This phenomenon indicates that there is enormous potential in the field of AI meme coins.

Recently, the emergence of some AI meme coin projects has created a brand new category of Crypto Assets. This emerging field is expected to achieve a hundredfold growth in the future, comparable to the returns gained by early participants in the DeFi summer of 2020.

Market Opportunities

AI Meme Coin is at the intersection of the Meme Coin supercycle and the AI supercycle, forming a unique "AI Meme Coin Omega Cycle".

In the first quarter of 2024, influenced by the surge in stock prices of a well-known chip company, many AI tokens also experienced parabolic growth, although their fundamentals and token economics remain questionable. The valuation of the top ten AI technology tokens has exceeded 30 billion USD, not including those with smaller market capitalizations. This may just be a "test phase" for the integration of Crypto Assets and AI, with potentially larger-scale increases expected in 2025.

However, the most striking performance may occur in the AI meme coin category. Currently, the total market capitalization of AI meme coins is only equivalent to the level of Ethereum Classic. Over time, AI meme coins may gradually attract funds from AI tech coins, traditional meme coins, and venture capital-backed tokens.

New "DeFi Summer" Moment

Some observers liken the process of a certain AI meme coin rising from zero dollars to a market cap of 1 billion dollars to a milestone event in this emerging industry. This reminds one of one of the catalysts of the DeFi summer in 2020—the rise of a certain token. This token was launched in July through a "fair issuance" and reached a market cap of 1 billion dollars in just two months. This event activated a large influx of on-chain capital into DeFi tokens, as it demonstrated that DeFi tokens with fair issuance could achieve significant appreciation starting from zero.

DeFi became a popular area in the last round, stemming from its novelty, appeal, and ability to spark people's imagination. In a zero interest rate environment, DeFi is seen as having the potential to attract funds from traditional finance and become the future of finance. This has triggered a wave of on-chain speculation, helping DeFi applications gain a large amount of locked value and users. When a certain iconic coin was launched, the total market capitalization of DeFi was around $5 billion, which then reached approximately $170 billion at the market peak, growing 34 times. If we compare it to a certain AI meme coin, we might still be in a very early stage, as the total market capitalization of AI meme coins is still less than $5 billion.

Reflexivity in the New Paradigm

The theory of reflexivity posits that investors' decisions are not based on objective reality, but rather on their perceptions of reality. The actions triggered by these perceptions can influence reality or fundamentals, which in turn affects investors' perceptions and ultimately impacts prices.

In the field of AI meme coins, prices reflect the total market value, while fundamentals are built on the scale of attention and "vision." These projects should not be simply seen as "pure meme coins," but rather closer to the concept of "tokenized AGI." Unlike projects supported by traditional venture capital, these AI meme coins start at a price of zero, providing everyone with the opportunity to participate early.

The role of reflexivity in the AI meme coin space may be as follows:

1. AI meme coin category attracts speculators, but most people may overlook it, thinking "just another meme coin narrative."
2. AI agents improve their functionality over time, gradually changing investors' perceptions from "meme coin" to "a whole new domain."
3. This will activate more capital and attention both inside and outside of Crypto Assets, attracting more speculative activity. Some struggling AI startups may choose to issue coins as a last effort.
4. Unlike static meme coins, these AI agents will execute activities on-chain, initiate NFT/DeFi projects, and have an impact in the real world. They are dynamically evolving, which will continue to attract attention.
5. The above factors collectively set no upper limit for potential valuations, which may ultimately lead to cycles of prosperity and recession.

It is worth noting that these tokens originate from fair distribution, aligning with the current spirit of the times, meme coins/AI super cycle, and anti-venture capital sentiment. Considering a well-known entrepreneur's prediction that AGI will be achieved in 2025-26, if one believes in the 4-year cycle theory, the peak of speculation may coincide with the peak of Crypto Assets in the fourth quarter of 2025.

Investment Positioning

In the last cycle, the total market value of DeFi reached 170 billion USD. If the AI meme coin industry reaches a similar scale, it means it could grow about 40 times from now. However, given the current total market value of Crypto Assets is higher, we could easily surpass these levels. The key is to build confidence, maintain patience, and adjust the portfolio as needed, as market rotations and volatility can be very intense.