The Roller Coaster Behind Meme Coins: When Emotion Becomes Currency, Are You a Participant or Just Being Exploited?

During the National Day holiday, A-shares are closed, and stock investors are squeezing into crowded tourist spots. But in the crypto world? An even more thrilling rollercoaster drama is unfolding.

A few meme coins you may have never even heard of—Meme4, PALU, and that thing called “某平台人生” (“Platform Life”)—saw their market caps multiply dozens of times in just a few days. Early entrants saw paper profits starting at millions of dollars. The Chinese-speaking community went wild, and KOLs on Twitter acted like they’d struck gold.

And what happened next? Before the party was even over, starting October 9, they all plunged together. Some coins crashed 95% in a single day, over 100,000 trading accounts were liquidated, and the total amount reached $621 million.

The dream of overnight riches turned into a bloody nightmare for retail investors.

Sound familiar? Think about the GameStop incident in 2021. Reddit retail traders banded together to drive the share price of a nearly-bankrupt game store to the moon, making short-selling institutions question their existence. The US SEC Chair called this a “milestone in behavioral finance”—the prices were absurd, but the trades were real and the information transparent, so it was just market behavior.

The American logic is simple: a bubble? Let it come. Because the bubble itself is the fuel for market evolution.

If this meme coin frenzy happened on Nasdaq, how would Wall Street play it? They’d immediately package a “Meme Stock ETF,” turning social media hype into an investment factor; The Wall Street Journal would publish in-depth analyses of “the triumph of retail capitalism”; The SEC would launch an investigation into “social media market manipulation,” but ultimately conclude: this isn’t fraud, it’s collective financial behavior powered by algorithms and social networks.

But if it were in China? The script would be completely different.

If “Platform Life” appeared on the Shanghai Stock Exchange, regulators would issue risk warnings immediately, media would call for rational investing, and the whole event would be labeled as “speculative abnormal trading,” becoming a textbook case for investor education. The Chinese market believes in “seeking progress while maintaining stability”—you can have fun, but there must be rules; innovation is welcome, but you bear your own risks.

Meme Coins Live in the Third World

The magic of the crypto market is that: it’s not under the SEC, nor under the CSRC. This is a no-man’s land, a gray financial laboratory powered spontaneously by code, liquidity, and narrative.

Here, American-style social speculation ( viral information spread + collective momentum ) and Chinese grassroots wealth psychology ( community resonance + mass participation ) have magically merged.

Exchanges are no longer neutral platforms, but “story machines”; KOLs are no longer bystanders, but price amplifiers; retail traders hype themselves up in cycles of algorithm and consensus, and are also drained dry in those cycles.

What’s the most critical change? Prices no longer track cash flow—they track narrative speed and consensus density. We are witnessing the birth of “emotional capital”—this thing has no financial statements, only cultural symbols; forget fundamentals, it’s all about consensus curves; forget rational returns, it’s all about chasing emotional explosions—this is a new form of capital.

When Algorithms Fail, Emotion Becomes Currency

The data speaks for itself: in the first nine months of 2025, 90% of top meme coins went to zero; in the second quarter, 65% of new tokens lost over 90% of their value within six months. It’s like a digital-era gold rush—most gold diggers lose everything, only the shovel sellers quietly get rich.

The key issue is: when money starts telling stories, the underlying logic of global finance is being rewritten.

In traditional markets, price reflects value; in crypto markets, price creates value. This is both the ultimate form of decentralization, and a dangerous boundary of irresponsibility. When narrative replaces cash flow, when emotion becomes an asset, we all become guinea pigs in this experiment.

Where’s the Way Out?

Web3 stands at a crossroads. Should it continue indulging in the short-term high of “emotional capitalism,” or shift towards the long-term building of a “value-driven ecosystem”?

There is only one real way out: strengthen community governance, introduce more transparent regulatory frameworks, and establish investor education mechanisms. Only then can decentralized technology truly promote global financial fairness, instead of becoming a tool for a few to harvest the many.

Next time you see a KOL hyping up a “100x coin,” ask yourself: Am I participating in financial innovation, or paying for someone else’s financial freedom?

When money starts telling stories, what you need most isn’t FOMO ( fear of missing out ), but a calm and rational mind.