From roller coasters to emotional capital: The global financial secrets exposed by the Meme coin frenzy

A Feast Predestined for Reversal

During holidays, the stock market is closed, but the exchanges are staging a wild show. In just a few days, several obscure Meme coins within the ecosystem of a leading exchange have multiplied their market caps dozens of times. The names of these tokens sound like jokes, yet they have allowed early participants to easily realize profits of over a million dollars on paper. The Chinese-speaking community is boiling, and KOLs are cheering and celebrating.

Then, starting mid-October, free fall began. Coins with daily declines of 95% are everywhere; over 100,000 traders have been liquidated, with total losses reaching $621 million. The legend of overnight wealth has instantly turned into a blood-stained story.

I have seen scenes like this on Wall Street too.

Remember the GameStop incident in 2021? Reddit retail investors united to target short-selling institutions, pushing the stock of a near-bankrupt game retailer to the sky. The US SEC chairman called it a “milestone in behavioral finance.” The key point is that as long as trading is genuine and information is transparent, even absurd prices are considered part of the “normal functioning of the market.”

This is the underlying logic of American finance: allowing bubbles to form, as bubbles themselves are catalysts for market evolution.

If the Meme coin frenzy had occurred on Nasdaq, the story would be entirely different. New financial products would emerge—such as “Social Hotness Index Funds,” quantifying online popularity into investment factors. Wall Street media would write lengthy analyses about “a new phase of retail capitalism.” The SEC would initiate research but ultimately conclude: this is not fraud; it is a collective financial response driven by group sentiment through algorithms and social dissemination.

In China, it’s a completely different story.

If similar phenomena appeared on the Shanghai Stock Exchange, regulators would quickly respond, media would emphasize rational investing, and the event would be classified as a “speculative market anomaly,” becoming a case study for investor education. The core logic of Chinese finance is “steady progress”—innovation is welcomed, but risks must be borne by individuals, and order must be maintained.

Where Do These Meme Coins Live

The key question is: these coins exist in a zone that is neither constrained by the US SEC nor regulated by any country’s securities commissions. They operate in a gray experimental space organized by code, liquidity, and narrative.

In this space, American-style social speculation mechanisms (information diffusion + collective momentum) and Chinese-style grassroots wealth psychology (resonance + community cohesion) blend in a fascinating way. Trading platforms are no longer neutral matchmakers but narrative creators. Influencers are no longer mere spectators but amplifiers of prices. Retail traders indulge in self-celebration and self-destruction within algorithmic recommendations and consensus cycles.

The most critical change: prices are no longer driven by cash flow but by the speed of narrative dissemination and the density of consensus.

We are witnessing the birth of a new form of capital—“Emotional Capital.” It has no financial statements, only cultural symbols; no company fundamentals, only consensus curves; it does not pursue rational returns but seeks the freshness of emotions.

Numbers Speak, Algorithms Fail

The cold data from the past nine months is in front of us: 90% of top Meme coins have collapsed in market value; in the second quarter, 65% of new coins lost over 90% of their value within six months. It’s like a gold rush in the digital age—most prospectors lose everything, only those selling tools profit.

But the problem lies precisely here: when currencies start telling stories, the rules of global finance are being fundamentally rewritten.

In traditional markets, prices reflect value. In crypto markets, prices create value. This is both the ultimate expression of decentralization and possibly a critical point of de-responsibilization. When narratives replace cash flows, and emotions become tradable assets, each of us is part of this experiment.

Where Is the Exit

The Web3 industry stands at a fork in the road. One path continues to indulge in the short-term frenzy of “Emotional Capitalism,” while the other heads toward long-term building of a “Value-Driven Ecosystem.”

The true way out requires: strengthening community governance mechanisms, introducing transparent rule frameworks, and establishing investor education systems. Only then can decentralized technology truly empower global financial fairness rather than becoming tools for harvesting profits.

Next time you see a KOL recommending a “100x coin,” ask yourself: am I participating in financial innovation, or am I paying for someone else’s wealth dream? When narratives surpass cash flow, what you need most is not following the trend but the ability to think calmly.