- 2036
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- š Why this coin 2Xād last night
GM everyone. This is 2036.
A few months ago, I read an excellent article about a topic thatās not often objectively studied in crypto: opinion leaders.
Hereās what it says ā
Crypto is threatened by decentralization. Decentralization is the transfer of power from Direct Leaders to Opinion Leaders.
When projects decentralize, Direct Leaders are nominally ceding power to the Token Holders ā but is this actually the case? No ā decentralization is the transfer of power from Direct Leaders to Opinion Leaders.
Opinion Leaders are people who inform votersā views on a project, because they are perceived as being higher context than them, perhaps wiser, and certainly more legitimate.
There are fewer Opinion Leaders than Direct Leaders, as Opinion Leaders have cross-project influence. As such, when projects decentralize governance, they centralize power across the industry.
By controlling information, Opinion Leaders dictate voting outcomes.
i.e. when there are no leaders left, opinion leaders (influencers) step in to fill that void and provide guidance to others on what to do.
Nowhere is this truer than with memecoins.
Now - I love memecoins.
I agree with what Riva Tez said last week at the Consensus Conference: memecoins enable financial freedom and can easily be opted-in and out of.
In contrast, the US dollar is a memecoin you can't escape.
But thereās a reality we need to embrace with memecoins: they donāt make it on their own.
Memecoins are a form of tokenized culture.
And theyāre spread by people.
Itās just that some people - influencers - have more clout than others.
This isnāt good or bad; we just need to be aware of it.
Thousands of memecoins are launched every day. But to reach a $100 million market cap, they usually need a group of influencers to share them with their audience.
After that, they can often take a life of their own.
And influencers come in all shapes and sizes.
Some overtly tell their followers to buy coins while dumping them behind their backs.
Most celebrities do thisāthey just walk away with the money, and the token falls to near-0.
But other influencers acquire some credibility by:
being around for multiple cycles
being right on major price calls they canāt influence themselves (e.g., predicting the movement of BTC)
associating themselves with other high-credibility influencers
One of these is a guy named Zion, who goes by the Twitter handle Ansem.
I like Ansem. I met him in person a few years ago, and he strikes me as a reasonable, well-intentioned guy (though I may not agree with everything he does).
Over the last few years, Ansemās grown an enormous following by:
calling the bottom on SOL at the depth of the bear market
being active in memecoins
Ansem has been big on WIF since its beginning, and heās one of the reasons itās done so well (which eventually spread to high-profile names like Arthur Hayes and institutions like Franklin Templeton).
Because of that, many people are looking to Ansem for the next WIF.
Now, Ansem covers a lot of coins on his Twitter pageā¦ but some get special attention.
Like HAMMY.
HAMMY is a small memecoin ($30M) Ansem mentioned on stage a few weeks ago at a conference.
Last night, he retweeted a picture of Kylie Jenner using the HAMMY meme in her Instagram story.
That sent the price of HAMMY up +100% in a few minutes.
Ok - so why am I telling you this?
Because if your memecoin of choice doesnāt have credible distribution, it will likely lose the attention war.
In fact, this is true for all of crypto.
Narratives come and go every week, but only a few have staying power.
They usually get that staying power because:
the price keeps going up
influencers keep talking about it
If your project has neither, it will either a) pump later when attention returns or b) never pump again.
Thatās why new coins tend to do better, on average. They can ignite and ride a new wave of attention, even temporarily.
Now - thereās nothing worse than being stuck holding coins that keep going down and being bitter about it but refusing to sell on the grounds of principle.
Instead, I recommend going with the flow of attention rather than fighting it or wishing it was different.
Influencers play a big role in crypto, but beware that they come in many different shapes and with varying intentions.
Accept them, but pick them carefully.
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.