187. Our Memecoin Strategy - Is It Investing or Gambling?

Welcome back to another episode of the Ben and Bergs Podcast. I'm Ben, your favorite high school dropout and founder of Collective Shift alongside Ms. Bergs, your favorite MBA and CEO of Collective Shift. Join us as we bring you world class crypto research and strategies to help you dominate this crypto bull market as well as behind the scenes view of us scanning the best crypto research company here in Australia. And if you like the podcast, we'd love for you to leave us a subscribe if you're on YouTube or follow us on your favorite podcasting app. So we come to you each and every week with some crypto insights. And this week, Bergs Meme Coins. Oh, been all the rage mate, hasn't it?

I've been looking forward to this one, mate.

Yeah, it's been, it's been a long time coming.

Very mixed opinions on meme coins. I personally for a long time have been very anti meme coins and you know, long term I from an investment perspective am cautious I think you could say, because I don't think many of these meme coins, if any at all, will last beyond this cycle. But it is hard to deny it is where all the attention is, all the volume is, all the speculation, all the growth. There's been a meme coin. So today's episode we're going to talk about are meme coins investing or they're gambling? We're going to talk about some strategies and just generally talk through why meme coins even a thing and why they drive value.

Absolutely. We've got a few mates that are just about that Meme coin life will pepper in their stories on the way.

Through and it's a hard life to live. I will give him that.

Oh mate.

Tom where he put out, put out a tweet and he's like putting your money into an AI Meme Coin at the generational top generation. I just watched it go all the way down. What a lad on a Sunday night. That's how he spends his Sunday nights.

Jamming Solana into AI Meme Coin generational tops. I laughed at that. That was funny. You have to bring out that tweet. Oh. So look, you know, meme coins have obviously emerged, they've been around for a little while but really this cycle started to really come out and essentially they are just tokenizing Internet culture, viral trends and really, you know, the allure of being able to make a lot of money really quickly is what attracts a lot of investors and speculators. So a lot of people again, you know, have seen the returns that, you know, older meme coins like Dogecoin and Sheba have created. And now, you know, these new tokens are really based on these, you know, engagement hype, different chains and there's just so many coming out burgers on the volume, volume of these tokens is nuts. So we're going to talk through a couple of the strategies that you can look at and why these meme coins have sort of come about.

But let's talk about. These are legitimate things where the fastest way to spread a message across the Internet is through a meme. You get memes on your phone, you get it straight away or you want to make fun of someone or you want to bring attention to something. Memes are the way to do this. This is just adding a financial aspect and gambling slash investing spin on an existing Internet culture, which makes it very attractive. So you're building on that flywheel of virality.

Yeah. And also a lot of these tokens, they're not VC backed. They're very pure in a sense of like there's no unlocks, there's no crazy early prices that people got involved with. They're just very pure speculative tokens that anyone can sort of buy and trade. And you know, very different to the VC coins like, you know, Solana and things like that.

They're open and community driven. Like, you know what you're getting into, you're not thinking, you know, that these will either go to zero, they'll make you a bit of money or go absolutely to the moon. Most are going to go to zero, most are a bit of fun to talk about with your mates. It's not all these like hidden unlocks and weird stuff, you know, you're not going to get dumped on.

Yeah, yeah, 100%. So look, the, the, the, the current meme coin mania really took off this year, especially around Solana. The activity has been on Solana, it's fast and cheap and it just allowed for these tens of thousands of coins to be created. Platforms like Pump Fun was a big one.

Millions of coins have been spawned from that, just that platform alone.

Well, essentially anyone can just roll up and just, you know, non technical, you know, people can just roll up and just create these meme coins, which is, which is nuts. And yeah, Solana's just really been at the forefront. So you know, again, why meme coins? Well, in contrast to a lot of the other fundamental, you know, thesises that, you know, myself and the collector Shift team really, really talk about and we invest behind is, is they literally offer no utility or you know, many of them don't and they're very different. As we said, these VC backed coins where there's a lot of token distribution to themselves and then you know, the retail was a little bit. And then you know, the VCs usually just get all the, all the, all the gains. You know, a lot of these tokens are much better for, for retail because there are no unlocks, no money for developers, none for early backers. In a sense they're just giving the retail the biggest chance to make, you know, the most of the money. Which is, which is awesome, right? Yeah.

And the utility are things like you can have some community kind of aspect to it, some experimentation.

That's right. You did the. Yeah, you know, mother.

Yeah, the mother token gambling aspect to it as well. Yeah, like that's the utility of these tokens. They do provide something to the people that buy it.

Yeah, yeah, exactly. But yeah, a lot of the speculative nature of these meme coins, you know, intrinsically, you know to do look at a lot more like speculating or gambling than the long term investing. And that's the game and that's where a lot of that's, you know, social media, Twitter X etc, you know, is where people can make a lot of money but also you can lose a lot of money. And you know, the growth of this industry. If we look back in like 2019, 20202020 21, it was essentially Dogecoin and Sheba were the, the top two. Right. And now in 2024 we've got, you know, nearly 10 or 15 meme coins in the, in the top 100.

See how many in this little graphic there you can name. Let's go from left to right.

Okay, so we've got Doge Shiba, Pepe Whiff.

I have no idea what that is.

I think Pop Cat's in there. Yeah.

And then it descends into madness.

Descends into madness. I, I think that's a guide.

So what we're looking at here is like this list of like little icons for the tickers and mate. So this is the thing with Ben and I. We'll go into like the first maybe five and the rest just descend into madness.

And I think that's really where like those teaser meme coins really come in. Like those more established coins is definitely where I'm looking at focusing. I was actually going to make a play in the last week or so, but I'm going to wait until the election sort of plays out those established coins in the top tier. You know, your Doge Shib with Pepe have a lot of recognition. The communities are strong, relatively more stable, quote unquote, but still have a lot of speculation that are tied to their community. And a lot of the market caps of those meme coins are already past a billion. They do have upside, but you know, a lot of the networking network effects and the major growth has probably already been. Then you've got some of those mid tier meme coins such as, you know, Gigachad, the SPX6900 book of memes. A lot of them still struggle to maintain momentum but a lot of these come and go really quickly and you know, a lot of the stuff, a lot of these coins have come from the low tier to the mid tier have been influenced by Murad who was at token 24 9, who had the.

Oh mate.

Who had the meme coin super cycle talk.

Hasn't he just started something?

Hasn't he?

Yeah, he did the super cycle talk. Everyone's congratulating him. Then he goes on a few more interviews and people are openly asking him, what do you think? Give us more detail. Yeah, and it's just taken off, mate. People are really getting behind this narrative of AI coins are the thing, they're the thing right now. And five or so coins from his talk are going to be above the all time high of Doge.

Yeah, yeah, that's nuts.

Yeah.

I think a lot of people too like have that, that idea that they can make 100x or they can really make life changing amounts of money on buying like you know, a small cap on one of these tokens. But it is very difficult to try and do that and to have some sort of risk adjusted play.

It'S basically speculating when you're looking that low. So one of the strategies that we're looking at in trying to, let's say trying to make a million dollars instead of turning 10,000 into a million, which everyone would like to do, but it's not really practical. Like the reality is a lot of.

People.

Not many people have been able to do that. Is that looking at some of those bigger cap coins and maybe trying to get just a 5x or 4 or 5x and maybe doing that with a few different coins. So going harder on some of those meme coins that have already read up and have some sort of network effects and they're on the radar of a lot of people trying to get a 5x in this cycle versus trying to find one to get 100x and fundamentally that's a lot easier to find three 5x tokens that are this to try and find 100x.

And just think about this, in what market are you going to get a 5x in the share market in any given year, if you get 15%, that's like outlandish and amazing.

Yeah.

If you promise anyone a 5x, they'll give you their money instantly. And I really like this quote from Eric Voorhees. He's a guy from Shapeshift.

Don't try to 100x in one cycle. That's horrible advice. Don't try to go from poor to rich in one blast. Go from poor to not poor, then to very comfortable, then to rich over multiple cycles and with wisdom, try a humble 10x this time. Achieve it and be thoughtful. Yeah, that is so good and so reasonable.

Look, even some of the best traders in our platinum group, right, like, you know, there's one in particular that about. I think, where did he put. I think he said he put. He said he put a hundred thousand into Goat, I think he said, or 150,000 to goat and it's up to 1.5 or 4 million, I can't remember.

Yeah, it was minimum 10x.

Yeah, I think he did a 10x, maybe put in 100 grand. It's up to 4 million in, in goat. Like that's, that's, that's amazing. Yet 40x. Right. So that's still very difficult to try and achieve and that is one of the best, you know, investors we've got in the group. So trying to find those 100x, not only has he been able to do that 40x, but then there's also those, those lost investments as well. Right. You know, where if there's 100,000, you put in 10 projects, you've got the loss of those as well.

Let's be realistic. If you're getting 100x, you got in so early, you are the liquidity, yeah. Literally, you are literally the market owner of everything. Right?

That is what you are and you are taking insane risk. And when we think about risk, we go from things like from cash to bonds to equities to private equity to crypto. And within crypto, this is going further and further out on the risk curve. Bitcoin, Ethereum, Solana, Altcoins, Defi, all that sort of stuff. And we're talking about the shitters, right, at the other end, where you can get massive, massive price appreciation because you are so early and you can get virality and people will get on board. You have the community, all the things that you need for price appreciation.

It's been funny though. This cycle, like the meme coins have been really the only sector that's outperformed. Like, traditionally, meme coins won't run into the back end of a bull market, but this has been completely different. And it's funny, like, you know, one of the biggest things about this cycle so far has been like, I've seen a lot of people talk about this is if you try and, you know, analyze or give reason to a lot of the investments you're making in the meme coin space, you're overthinking it. You need to like dumb your thought process down like 10x and be like nearly a preschool level. Like, that's what you need here. Like, the dumber you're thinking, the better it is. It goes against everything.

The person that popped into my head when you said that is Greg Oakford.

Oh, whack.

Not because he's dumb, but because he got it. Like, he got it. NFTs right, NFTs. I'm there, I'm overthinking it. Thinking about too much. He put his marketing brain on it and he's like, this has attention. This serves this community. This is going in this direction. I'm going to invest in that. And he did very, very well from that. He was able to choose the ones because he only looked at it with that very small lens, didn't overanalyze.

And he understood community well. He understands community very well.

Yes.

Yeah. And I think that's same with, you know, on the tokenized space, like Tom and those guys, like, they just, they get that space. I think it is very difficult. Like we know, you know, people that are full time trading the meme coins and it's very difficult. You've got to, you know, got to have a lot of liquidity. You've got to not lose your head. You've got to be able to get in and get out of these things really quickly and you're going to, you know, make a lot of money. You need to be, you know, being able to rotate in and out. Like, it's a very difficult thing to do.

And let's say the unsaid thing for me, I do not invest in meme coins. For me, it's like sticking my hand in a trap and getting it out before I get trapped. I don't want to live that life. I don't want to sit in front of my PC all the time. Those kind of gains, I don't want to chase them. I don't Want those losses. I don't need that much more money, like insane gains to be able to achieve my goals. I understand their place and their purpose, but I've learned over time it's not for me. The previous like meme coins in air quotes ICOs were pretty much the equivalent of this where you don't know what's going to happen. You can do a little bit of analysis on it. Most will go to zero, some will, will return some money and then there was an aspect of NFTs about that as well. Now in this cycle it's meme coins slash, you know, AI coins. AI Meme coins that are just being spawned and for my investment I'm like, no, not for me. What about you? Do meme coins have a place in your portfolio and if they do, which ones? The kind of established ones or are you going for some absolute moonshots?

Yeah, no, they do hold a place and.

Again I've been holding off allocating to this just because of the dominance of BTC and just where we are in the market. I really want to wait to post election before I do this. But not moonshots. I'm looking at making a play across maybe three or four memes that hopefully can do a 4 or 5x small amount of my portfolio that I'm definitely not holding any longer than this cycle and looking at those top tier ones. So something around the sort of popcat with pepe dough somewhere across those just to get some exposure. But I'm certainly not looking down the list too heavily because they just come and go too quickly. It's too much to monitor and it's just not my strategy.

And if you are going right down a list, you need to know what you're doing. At least get on a test net or try with a small amount of money. You need to understand where these coins are, how you buy them, if you're on chain, how gas works, what you need to do to front run things, how you can put your exits in like have them in an order book, get all that sorted because literally the peak can be a few minutes and then it's just down only.

Yeah, I'd be, I'd be setting stop losses and stuff. If you have some of those lower cap tokens and you just need a lot more time. The further down the list you go, the more time you need because these things come and go. I've seen some of these coins literally, you know, within, within a week or two, like narrative's dead. We moved on. It's onto the Next thing like this just, just comes and goes.

Yeah. And you think about this. If there's not much behind a coin, if it's just an initial meme and you create a few different memes, how long is that going to last? Until the new shiny thing comes out. And think of the one if you got like private WhatsApp groups where you get memes from your mates. Right. There are the few that you constantly reuse, but it's always new types of memes, new like little templates. So all this is really about is attention. Which actually leads us on nicely mate to Utility driven meme coins with your girl Iggy.

Yeah, look, I think the utility is an interesting one. Like the.

Iggy was. I mean I don't think she's the first to do this, but like, you know, she's actually using the Mother token to help people get access to real world events and discounts on products and merchandise. It's essentially the NFT model which is with tokens.

That's exactly right.

Another one I'll shout out and shill and full disclosure, this is one I own and very, very, very speculative. Imf. So imf IMF is essentially a meme coin defi play where you can lend against your meme coins and earn their stablecoin. Again, the utility driven meme coins haven't performed that great to date, but it's an interesting development. Again, potentially overthinking this with meme coins. Again, trying to get a utility. That's not the idea of meme coins. So it's really why I don't think that performed too well. But I don't know, it's an interesting space. I don't know if this will really take off like the Utility driven meme coins. I don't think people buy the token.

It's far less personalized the token than an nft. Like if you were to buy her NFT makes sense, but to buy a token to get access to discounts. Yeah.

What's interesting with Iggy and Mother, she's doing a lot in the space. She really understands attention and she's trying new things. Even the, the price chart of this. So it peaked, I don't know, within the first week at about, what's that.

23 cents, currently at 7 cents. So it's had quite a few peaks and troughs. Made it back up to 15 at one point. And yeah, I constantly see her doing stuff with it. She cops a lot of flack but she is.

Learning and trying and it's just that understanding attention and eyeballs. And this was back in June and we're now in October and it's still a thing. So to have people's attention for that long and it not fall off a cliff and be worth zero is interesting to me. Not interesting enough to invest in it, but interesting enough to kind of follow and see what she's trying.

Yeah, I'm certainly never touching these sort of celebrity coins. If you look at the performance of pretty much all of them have all gone to zero. But, you know, maybe Iggy can break out. But again, I probably wouldn't be looking at that as an investment thesis. So I think for now, if you're wanting some exposure, looking at the top, the top guys in the, in the space, sort of those top tier billion dollar plus projects keeping allocation relatively small and you know, again, keeping a close eye on it, because I think these things, again, they come and go pretty quick and 99% of these are going to lose their value in the bear market.

Yeah, and when we talk small, we mean small. Like maximum would be like 1% of your portfolio, if that in. In a coin.

Yeah, totally agree.

Like this is highly, highly speculative where if you get a return, great. If you lose 1%, you're not really going to cry about it.

Totally agree. Awesome. Well, hopefully you enjoyed that episode. We certainly did. And yeah, the meme coins are certainly a growing space we continue to sort of talk about and look. And again, I'm going to make a play probably in the next month or so post election, so be keen to by the time this episode comes out, maybe post election. So, yeah, I'll be sharing that obviously with the members that listen in. But yeah, let us know. What meme coins do you own? Is there any ones you're looking at? There's certainly some pretty degenerate place in the space.

It's insane. People actually afraid to go to their accountants because of the name of these coins. It's like racial slurs. Like, you know, gender and yeah, it's sex slurs. It's just like, it's horrendous. You look at it, you're like, oh my God, I have to report this to a government body.

But yeah, hopefully you enjoy that episode. Folks, if you, if you think anyone would enjoy this or get some value out of it, we'd love for you to share with a friend. It's how to grow the podcast each and every week. And make sure you check us out on your podcasting app or on YouTube, depending on which platform you're on. Yeah, we're coming to you each and every week, so hopefully enjoying the podcast and we'll see you on the next episode.

Thanks, champions.