National Day Roller Coaster: How does sentiment become a new type of asset behind the big pump and big dump of Meme coins?

National Day holiday, A-shares are closed, but the gambling in the encryption world never stops.

In the past few days, several bizarrely named Meme coins have gone crazy in the ecosystem of a leading exchange—Meme4, PALU, and something called “XX Life” have seen their market value multiply by dozens in just a few days. Early investors have easily seen their account balances exceed one million dollars. The Chinese-speaking groups have exploded with activity, and the big names on Twitter are popping champagne, eager to kiss their phone screens.

Not feeling great for a few days.

Starting from October 9th, these coins plummeted down like a free fall. Some dropped 95% in a single day, with over a hundred thousand people liquidated, totaling 621 million dollars evaporated.

Yesterday it was still called “wealth password”, today it has turned into “bloody lesson”.

This scene seems familiar

Do you remember the GameStop incident in 2021? Retail investors on Reddit banded together to skyrocket the stock price of a nearly bankrupt game store, causing short-sellers to question their existence. The chairman of the U.S. SEC at the time said it was a “milestone in behavioral finance”—no matter how outrageous the price, as long as the trading is real and the information is public, it is part of the market.

The logic of the Americans is simple and straightforward: let the bubble fly for a while, because the bubble can foster new playstyles.

If this Meme coin farce happened on Nasdaq, Wall Street would have packaged a “social sentiment ETF” long ago, turning Twitter heat into investment indicators; The Wall Street Journal would write a lengthy article praising the “retail revolution”; the SEC would at most study the possibility of “social media manipulating the market”, and the final conclusion would likely be: this is not called fraud, this is called the algorithmic manifestation of collective sentiment.

What about converting to A-shares?

If “XX Life” is listed on the Shanghai Stock Exchange, the regulators will issue risk warnings immediately, and the media will call for rationality. The entire event will be characterized as “speculative volatility” and become a live teaching material for investment education. The underlying logic of the domestic market is “stability as the priority” - while excitement is welcome, there must be rules; innovation is allowed, but the risks must be borne by oneself.

Meme Coin Lives in the Third Space

The magic of the encryption market lies in the fact that it is neither regulated by the SEC nor constrained by the Securities Regulatory Commission. This is a no man's land, a financial experimental field that operates on its own, relying on code, liquidity, and narratives.

Here, the American-style social speculation mechanism ( information goes viral + collective impulse ) and the Chinese-style grassroots wealth dream ( community identity + loser counterattack mentality ) have magically hybridized.

Exchanges are no longer neutral referees, but masters of creating hype; KOLs are not spectators, but amplifiers of price; retail investors are trapped in a dead loop of algorithms and consensus, indulging themselves while also self-harming.

The most fundamental change is: prices no longer look at cash flow, but at the speed of story dissemination and the concentration of consensus. We are witnessing the birth of “emotional capital” — no financial reports, only memes; no fundamentals, only consensus curves; not pursuing reasonable returns, but chasing the emotional highs of a new species.

Beyond algorithms, emotions are the way to go.

The data is as follows: In the first nine months before 2025, 90% of the top Meme coins' market value evaporated; in the second quarter, 65% of new tokens lost over 90% within six months. This is reminiscent of the gold rush in the digital age, where most people lost money to the point of vomiting, and only those selling shovels made guaranteed profits.

The problem is: when money starts telling stories, the underlying logic of global finance is being disrupted.

In traditional markets, prices reflect value; in the encryption world, prices create value.

This is the ultimate form of decentralization, and it may also be the abyss of disresponsibility. When narrative replaces cash flow, and when emotion becomes an asset, each of us is a guinea pig in this experiment.

Where is the way out?

The Web3 industry is at a crossroads. Should we continue to indulge in the short-term frenzy of “emotional capitalism,” or shift towards “value-driven” long-term development?

The real way out: Community governance needs to be strengthened, regulatory frameworks need to be transparent, and investor education needs to keep up. Only then can decentralized technology truly promote financial fairness, rather than becoming a tool for a few to reap profits at the expense of many.

The next time you see a big influencer wildly promoting “hundredfold coins”, ask yourself: Am I participating in financial innovation, or am I paying for someone else's financial freedom?

When currency starts telling a story, what you need most is not the FOMO( fear of missing out), but to calm down and think — who exactly wrote this story?