Cryptocurrencies are not equities. An L1 blockchain like Ethereum or Solana isn’t a fair comparison to stocks. We use things like market capitalization to measure the value of tokens, but this is probably a flawed way to view cryptos in general.
If we compare cryptos to anything – we should compare them to currency. No one ever invested in the US dollar to get rich. Having US dollars was a by product of some activity that created wealth. If you are a good restaurateur, the pile of cash you have is a result of your talent.
The fact that the total amount of BTC adds up to a trillion USD (or more) is meaningless. Cryptos are more like a currency system than anything else, and the value of money isn’t measured by the total amount in existence.
So where does the lovable PEPE fit in?
Here is the rub – we are going into crazy land. Both in terms of the global economy, and in terms of our collective social structure. In short – human values are based on faith – not numbers. People form attachments based on expectations of the future and experiences in the past.
We might be looking at the biggest movement of value in human history. PEPE is an example of how value is projected, and it could be a sign of things to come.
The Meme Revolution Is Here
You can’t kill the USD because fiat currency is a faith-based system. The golden anchor is long gone, and we as a global economy are floating free on the waves of the human unconscious. The current form of fiat currency will give rise to a new era of digital currencies, right after the inflationary firestorm.
Make no mistake – CBDCs are coming. In the same way that people who live in the USA use US dollars, the same people will line up to use whatever CBDC the FED decides to roll out. Ditto for the UK and other Western nations.
Totalitarian nations like China force whatever they want on the population. So a CBDC is pretty easy to roll out in the nation that brought you the “Tiger Chair”.
Here is the problem for Central Banks and major governments…no one wants to use dirty digital money from power-mad sociopaths (Venezuela already tried). While the home team is far more likely to use a CBDC from a nation’s Central Bank – the global usage will be nil if the currency doesn’t offer something special to the users.
People use the USD in places like Argentina and the DRC because they believe it will be more stable than the home currency – and it has international value. We have personally tried to change Argentine Pesos outside of Argentina – and it isn’t easy.
In a very real sense, the USD is a global value meme. Gold is as well, but it is much harder to move over borders in large amounts. Now, Central Banks all over the world want to transfer the faith that people have in major currencies like the USD, GBP and EUR into CBDCs – but it may not be as easy as they think.
The Rise Of PEPE
So just for fun – there are around 420 trillion PEPE tokens. At $0.01 per token – that would value the “project” at over $4 trillion USD. And here is where the issues with math enter the equation…
There is no set value for anything!
Comparing different cryptos with market capitalization is silly.
A project will have as much value as the market wants to give it. If people see PEPE as a way to trade – and it goes up in value in the middle of a global inflationary collapse – the idea that its market cap will determine its trading level is absurd.
Sound far fetched?
Think about the way fiat currency works right now. The guy in the DRC (central Africa) who is trading in physical USD doesn’t care about the USD’s money supply expansion, or FED policy. They just know it is safer then the local (junk) fiat currency – so they use the USD.
In the world of cryptos – the market cap isn’t relevant from a usage perspective. You can use any token you want for transfers (sorry regulators – this will be a major headache). Valuation only matters if you plan to hold the token for more than an hour.
In a world where PEPE returns more than 20X in a year – people would have every reason to buy and hold meme tokens. The fact that there is more than one meme token is irrelevant. There is no law that says the total valuation of meme tokens can’t exceed the global money supply.
Just ask the OTC derivatives market…
On A Long Enough Timeline, All Meme Tokens Go To Zero (?)
Meme coins generate massive profits. It is 100% true. The white hot NASDAQ created returns of around 130% on a price (excluding dividends) basis over the past 5 years – which sounds good if you have never owned a successful meme token.
PEPE is up over 1,000% in the last 12 months – and even more if you bought it before its first parabolic spike. Some early PEPE buyers turned a few thousand USD into tens of millions – which seems like a pretty neat “asset class” for people who like to gain a lot of money quickly.
You might think we are cherry picking the market darling, and not addressing the hordes of other meme coins.
Let’s take a look at a few other meme coins!
- Cum Rocket – trading as CUMMIES, is currently up over 300% in the last 12 months, and more than 450% from its all time low.
- Cat Girl, or CATGIRL is up a less impressive 70% in the past 12 months, but up a striking 97,157,814,729% from its all time low two years ago.
- Wojak, trading as WOJAK,Wojak gained over 1,000% in the last 12 months, and is up over 2,000% from its lifetime time lows.
Seems like these tokens create some pretty impressive returns…
Will PEPE or any of these other meme coins go to zero?
Tell us how that would work…as tokens, unlike companies (shares) and governments (bonds), can’t go bankrupt. Unless the entire project is sent to a burn wallet – tokens like PEPE live for as long as the blockchain that hosts them.
There is no risk of default – unless the global power grid goes down forever.
We assure you – if there was a massive multi-year blackout – the movie “The Road” would look like an optimistic scenario. If you believe in a digital future – meme coins are here to stay.
Sorry Bitcoin purists – in for a penny, in for a pound!
