Analysis of Investment Strategies for Memecoins

Investment Value of Memecoins

Memecoins are highly favored as a high beta choice for Layer 1 (L1) assets. Taking BONK as an example, a moderate allocation can provide leverage for L1 assets without increasing liquidation risk.

Data shows that when the 30-day beta of BONK exceeds the 90-day rolling beta, its 30-day and 60-day average returns reach 124% and 413%, respectively. This high-risk, high-reward characteristic makes it a leveraged bet on L1 assets.

Price Performance Analysis

The price trend of BONK is closely related to SOL, but during periods of strong performance, this correlation often weakens. When SOL rises more than 5% in a week, the average return rate of BONK is more considerable:

• 1-week average return 26%
• 30-day average return 141%
• 60-day average return 512%

However, in about 1/3 of the cases, BONK may still decline, indicating that SOL's performance does not fully guarantee BONK's excellent performance.

On-chain Data Analysis

On-chain data provides an important basis for assessing the underlying quality and beliefs of holders. The following metrics can be used to compare top memecoins:

1. Token holder 90-day growth rate
2. Median and Average Holding
3. The proportion of wallets holding over $1000 and $100k
4. Whale Retention Rate
5. Giant Whale DEX Net Inflow/Outflow Situation

These indicators help measure the holders' confidence and the overall health of the project.

Other Considerations

In addition to on-chain data, attention should also be paid to:

• Trading Liquidity
• Experienced multiple significant pullbacks
• Open Interest

Community factors are equally important, including:

• Resonant narratives and slogans
• Strong sense of community belonging
• Effective leadership and coordination
• Cultural Integration Level
• Social Media Promotion Strategy

Value Assessment

The "fair value" of a memecoin can be assessed through the following methods:

1. MVRV Ratio: When it is below 1, it may be close to a local bottom.
2. Momentum Indicator:
   • RSI: Close to 30 is oversold, close to 70 is overbought
   • The position of the price relative to the key moving average line
3. Google Search Trends

Macroeconomic Environment

Memecoins are extremely sensitive to liquidity conditions. A favorable liquidity environment and risk appetite sentiment are key to allocating memecoins.

Conclusion

Investing in memecoins requires a comprehensive consideration of various factors, including beta, on-chain data, value assessment, and the macro environment. Although the risks are high, systematic analysis can still help identify investment opportunities in this area.