Is Meme Coin Really Consuming VC Coin?
No, it is just an illusion of collective market consciousness. This illusion is known as short-term memory over-reliance in neural network learning and often occurs in market analysis.
This thread will use quantitative comparative analysis to compare the data of Meme Coin and VC Coin in terms of 7-day rolling volatility, correlation, and price seasonal factors during the current uptrend period (from October 2023 to present), in order to review their true relationship.
To ensure consistency in the comparative analysis, we will categorize Meme Coin and VC Coin into three types: classical leading coins, emerging white horse coins, and newly listed star coins.
Classical leading Meme Coin DOGE, SHIB VS classical leading VC Coin AAVE, UNI, DOT, MKR
From the perspective of price seasonal factors, classical leading Meme Coin and BTC have a strong resonance in seasonal factors, with a stronger impact on prices at the beginning of the month. On the other hand, classical leading VC Coin has a certain time lag with BTC in terms of seasonal factors.
From the perspective of 7-day rolling volatility, the structure of UNI is consistent with that of SHIB, showing two abnormal volatility peaks during this uptrend period.
The two abnormal volatility peaks of SHIB are almost synchronous with BTC, and DOGE’s volatility peak has the same characteristics. This means that the attribute of classical leading Meme Coin hedging the decrease in BTC volatility is weakening.
The results of the correlation matrix further confirm the changing attributes of classical leading Meme Coin. During this uptrend period, the correlation between SHIB and BTC is 0.53, and the correlation of DOGE is even higher, reaching 0.72.
Emerging white horse Meme Coin PEPE, FLOKI VS emerging white horse VC Coin TIA, RNDR, Mobile
TIA has a stronger seasonal factor compared to PEPE and FLOKI, which is why there is market speculation that modularity is the biggest meme in this period.
In terms of 7-day rolling volatility, TIA is also the undisputed leader, rather than the brightest star in the current Meme Coin, as expected.
In terms of correlation, it is also very interesting. During this uptrend period, the correlation between TIA, Mobile, and BTC is almost 0, while the correlations of PEPE and FLOKI with BTC are 0.61 and 0.46 respectively.
Newly listed star Meme Coin BOME, SLERF VS newly listed star VC Coin ENA, Aevo
Because they are new coins, the time interval we set is from March 1st of this year to the present.
During this period, BTC’s seasonal factor has a weaker influence, Aevo’s seasonal factor is mainly negative, and SLERF’s seasonal factor has a stronger influence.
Since April, both VC Coin and Meme Coin have experienced a rapid decline in 7-day volatility for newly listed star coins.
In terms of correlation, it is still beyond expectations. Among them, the correlation between BOME and BTC is 0.61, ranking first.
In conclusion, the secondary market price characteristics of VC Coin and Meme Coin are not clearly distinct. They do not have a mutually exclusive relationship of “you have it, I don’t.” Instead, they often have a counteracting relationship in different life cycles during different time periods. Since April, the decline in volatility and weak correlation with BTC in newly listed star VC Coins has made it difficult for secondary market traders to profit, which is the main reason for the market’s FUD sentiment towards VC Coins.
But as rational investors, we need to understand clearly that the phenomenon of Meme Coins > VC Coins is only a cyclic phenomenon that has lasted for only two months so far. Do not easily assume that there will only be Meme Coins in the future, and do not fill your investment portfolio with Meme Coins. Overseas KOLs who market themselves in this meme trend are not trustworthy, and Western celebrities who issue coins in this meme trend will definitely RUG. Please remember, we are here to invest, not to gamble.