The memecoin supercycle is super unsustainable

Investor and memecoin analyst Murad Mahmudov's memecoin supercycle theory has gained traction among traders. The theory, in short, states that a confluence of factors will create an essentially unending supercycle for meme-centric cryptocurrencies.

A recent theory coined byMurad Mahmudov has gained popularity among crypto traders, suggesting that a confluence of factors will create an essentially unending "memecoin supercycle." This theory posits that meme-centric cryptocurrencies will continue to experience a sustained bull run.

Unlike other crypto market narratives that boast complex technical explanations and mechanics, memecoins appear to rely solely on community, emotion, and the promise of wealth. This lack of fundamentals, however, doesn't seem to deter traders who are drawn to the sense of camaraderie and the promise of rapid gains.

Kyle Kemper, who has developed political memecoins such as Make America Healthy Again (MAHA), argues that the memecoin supercycle doesn't signal the death of fundamental analysis but rather a shift in the metrics used.

“Critical analysis of projects, teams and missions is being replaced by factors like how strong a project’s key opinion leader (KOL) game is, along with volume and chart performance,” he told Cointelegraph.

The apparent success of Mahmudov's memecoin supercycle theory among crypto traders indicates a deviation of their preferences.

Basel Ismail, CEO of investment analytics platform Blockcircle, attributes the rise of memecoins to the increasing maturity of crypto traders, stating that many traders have experienced at least one market cycle, gaining valuable lessons from their experiences.

Ismail believes veteran crypto traders have realized that most tokens marketed as providing technical solutions — so-called utility coins — lack real intrinsic value and utility beyond speculative price movements. Mahmudov covered this matter during a presentation at Token2049, quoting an X user who argued:

“Most shitcoins are valued on their meme component. I’d say around 70% of a utility token’s valuation stems from speculation.”

He went on to explain that traders, shaped by past experiences, are wary of being “burned again” after witnessing crypto projects with supposedly solid technological foundations soar 100x in three months, only to collapse by 99% in the same period.

Memecoins are also fueled by a “very strong sentiment that is anti-venture capitalism and anti-private equity,” said Ismail.

He explained that investors have felt misled by venture capitalists, who often release locked tokens on centralized exchanges, dumping them on unsuspecting retail investors.

The love for memes combined with the power of mimetics has created a social and psychological phenomenon where people want to unite with like-minded people. “We are all congregating, sharing joint beliefs,” said Ismail.

Ismail noted that while the motivation may seem superficial to some, the strength of a shared ideal within a community of investors is significant. He cited the unprecedented phenomena of the AMC and GameStop stock runs. “They rally the troops, bringing a young, vibrant and energetic community together around an ideal or philosophy that they can make a long-lasting impact.”

Despite the apparent success of the memecoin supercycle, some doubt its long-term sustainability. Jameson Lopp, co-founder of crypto custodian Casa, told Cointelegraph he believes the memecoin frenzy is unlikely to last and may be misguided.

Pseudonymous crypto market analyst and trader Crypto Rand explained that the memecoin economy thrives on hype, driven by impulsive traders chasing a quick buck. This mindset fuels extreme volatility and rapid liquidation cascades.

Crypto Rand told Cointelegraph that the success of memecoins lies in their marketing and hype, comparing them to clothing trends that come and go in a blink.

97% of memecoins have died since 2024. Source: Chainplay

Crypto Rand said he sometimes drops money into memecoins, stating that it has the same value as a bet on a soccer match or the US elections.

Angel Versetti, founder and owner of the Dogecoin Foundation, criticized Mahmudov's supercycle theory, telling Cointelegraph it’s based on investors growing irrational due to collective mental and hormonal shifts.

He concluded that “the state of investors in the memecoin financial markets is basically indicating a mental illness.”

Slide where Murad Mahmudov references collective mental and hormonal well-being. Source: Token2049

For Versetti, a market model that bases its growth on “a greater level of delusion” among market participants “doesn’t sound like a sustainable economic model.”

Since memecoins do not intend to create any utility, they can only keep growing “purely due to the growing delusion of investors,” he said.

Versetti explained that initial coin offerings went through a similar process, where an investor would have a 1% chance of succeeding, but at least some “attempted to have a vision and build something.”

He pointed out how some legit products have emerged from the ICO explosion, such as Tezos XTZ $0.768, Cosmos ATOM $4.29, Chainlink LINK $11.03, BNB BNB $591.83 , and Basic Attention Token BAT $