Analysis of Memecoins Investment Strategies

Memecoins, as a special category in the cryptocurrency market, have attracted the attention of many investors. This article will analyze the investment logic and strategies of memecoins from multiple perspectives.

Beta Strategy

Some memecoins have a higher beta coefficient against Layer 1(L1) assets, which means they can provide leveraged effects on L1 assets without increasing leverage risk. Taking BONK from the Solana ecosystem as an example, when its 30-day beta exceeds the 90-day rolling beta, it often indicates a wave of bullish market.

The price movements of BONK and SOL are highly correlated, but during periods when BONK performs exceptionally, this correlation may weaken. Overall, BONK can be seen as a high-risk, high-reward bet on SOL.

On-chain Data Analysis

By analyzing on-chain data, we can gain insights into the quality and conviction of memecoin holders:

• The growth rate of token holders reflects recent popularity.
• The median and average holdings reflect the beliefs of holders.
• Large holders ( > $1000, > $100k ) ratio shows investor interest
• The retention rate of whales and the net inflow/outflow of DEX reflect the movements of large holders.

In addition, factors such as trading liquidity, the number of significant pullbacks experienced, and the volume of open contracts are also worth paying attention to.

Community and Faith Factors

High-quality memecoins often possess:

• Resonant narratives and slogans
• Strong sense of community belonging
• Good leadership and coordination
• Deeply embedded cultural elements
• Excellent marketing ability

Value Assessment

The "fair value" of a memecoin can be assessed through the following methods:

• MVRV Ratio: The ratio of realized value to market value
• RSI Indicator: Assess overbought and oversold conditions
• Moving Average: Analyzing Price Trends
• Google Search Trends: Measure of Social Attention

Macroeconomic Considerations

Memecoins are highly dependent on favorable liquidity conditions and risk appetite sentiment. It is essential to closely monitor the overall market environment when investing.

In summary, memecoin investment requires a comprehensive consideration of multiple factors and the establishment of a systematic analysis framework. Nevertheless, memecoin remains a high-risk asset, and investors should approach it with caution and manage their positions wisely.