The Meme Coin Frenzy: When Narratives Replace Cash Flow, Global Financial Logic Is Rewritten

The Cryptocurrency Frenzy During National Day Holiday

This year’s National Day, while stock investors are crowded among tourists in scenic spots, another drama is unfolding in the crypto world. In the ecosystem of a major exchange, several obscure Meme coins have skyrocketed in market value by dozens of times within just a few days—tokens like Meme4, PALU that sound like jokes, yet have allowed early participants to easily see gains exceeding one million USD on paper. The Chinese-speaking community is boiling with excitement, and top KOLs are cheering wildly, as if discovering a new continent.

The celebration didn’t last long. Starting October 9, these coins began to plummet freely. Some dropped as much as 95% in a single day. Over 100,000 traders were liquidated, totaling $621 million.

The myth of overnight wealth has quickly turned into a blood-stained history.

This scene has been seen on Wall Street and in Lujiazui before.

The Ghost of GameStop

Remember the GameStop incident of 2021. Retail investors on Reddit banded together to push the stock price of a near-bankrupt retailer up by thousands of times, causing short-selling institutions to suffer huge losses. U.S. regulators called it a “milestone in behavioral finance,” and despite the absurdity of the prices, as long as the trading was genuine and information was sufficient, it was considered “part of the market.”

The logic in the U.S. is simple: let bubbles form because they are catalysts for market evolution.

What if the Meme coin frenzy happened on Nasdaq? First, it would spawn new financial products—like “Meme Asset ETFs”—quantifying social buzz into investment factors; second, media would extensively discuss the “victory of retail capitalism”; finally, regulators would start research, ultimately concluding that: this isn’t fraud, but a collective financial response driven by group sentiment through algorithms and social dissemination.

But in China, the story would be completely different.

If such coins appeared in A-shares, regulators would quickly issue risk warnings, media would call for rationality, and the entire event would be labeled as a “speculative anomaly,” serving as a case for investor education. China’s market logic is “steady progress”—lively markets are fine, but order must be maintained; innovation is welcome, but risks are borne by individuals.

The Unowned Land of Financial Experiments

But Meme coins live in another world. The crypto market is neither constrained by U.S. regulation nor governed by China’s CSRC. It is a lawless zone—a gray financial experiment space formed by code, liquidity, and narratives self-organizing.

Here, American-style social speculation mechanisms (information diffusion + collective momentum) and Chinese-style grassroots wealth psychology (bottom-up resonance + community participation) blend in a fascinating way.

Exchanges are no longer neutral platforms but become “narrative creators”; KOLs are no longer mere spectators but act as amplifiers of prices; retail traders indulge in self-celebration and self-destruction within cycles of algorithms and consensus.

The most fundamental change is this: prices are no longer determined by cash flow but by the speed of narratives and the density of consensus.

We are witnessing the birth of “sentiment capital”—no financial statements, only cultural symbols; no company fundamentals, only consensus curves; not pursuing rational returns, but emotional release. This is a brand-new, bizarre form of capital.

Data Does Not Lie

Actually, data does not lie: in the first nine months of 2025, 90% of top Meme coins’ market caps collapsed; in Q2, 65% of new tokens lost over 90% of their value within six months. It’s like the gold rush of the digital age—most prospectors lost everything, only those selling shovels made steady profits.

But here lies the problem: when currencies start telling stories, the logic of global finance is being completely rewritten.

In traditional markets, prices reflect value. In crypto markets, prices create value.

This is both the ultimate decentralization and possibly the limit of de-responsibilization. When narratives replace cash flows, and emotions become assets, each of us is a participant in this experiment.

The Crossroads

The Web3 industry is at a pivotal moment. Should it continue to indulge in the short-term frenzy of “sentiment capitalism,” or move toward long-term building of a “value-driven ecosystem”?

The real way out is: strengthen community governance, introduce more transparent rules, and establish investor protection mechanisms. Only then can decentralized technology truly empower financial fairness, rather than becoming tools for “cutting leeks.”

Next time you see a KOL wildly recommending “hundredfold coins,” ask yourself: Am I participating in financial innovation, or just paying for others’ wealth freedom?

When currencies start telling stories, what you need most is not FOMO but the ability to think calmly.