Meme coins plummet reveals the truth: Behind retail investors' frenzy, the global financial logic is being reshaped

During the National Day holiday, the A-shares market was closed as usual, but cryptocurrency exchanges staged a wild wealth spectacle.

Within a major exchange ecosystem, several unknown Meme coins saw their market caps multiply dozens of times in just a few days. The names of these tokens sounded like jokes, yet early participants’ on-paper gains easily exceeded one million USD. The Chinese crypto community exploded, with various KOLs cheering on social media as if opening the door to a new world.

But the celebration was short-lived. Starting October 9, these tokens began to plummet in a free-fall manner. Single-day declines reached as high as 95%. In just a few days, over 100,000 traders were liquidated, with a total amount of up to $621 million.

The myth of overnight wealth has turned into a blood-stained ledger in the blink of an eye.

This show, Wall Street and financial centers have long seen before

Remember the GameStop incident of 2021? Reddit retail investors teamed up to push the stock price of a near-bankrupt retailer up by thousands of times, causing heavy losses for short-sellers. U.S. regulators even called it a “milestone in behavioral finance.” How to evaluate it? If trading is genuine and information is sufficient, it is simply considered “part of the market.”

The American playbook is: Let bubbles form, because bubbles will foster new financial innovations.

If this Meme coin frenzy had happened on Nasdaq, The Wall Street Journal would have analyzed it in detail as a “victory of retail capitalism,” investment banks would launch “Meme Coin Index Funds,” and after SEC research, the conclusion might be: this is not fraud, just a financial reaction driven by group sentiment through algorithms.

But in another system, the story is completely different.

If “hot coins” appeared in the A-shares market, regulators would quickly issue risk alerts, media would call for rational investing, and the entire event would be defined as a “speculative anomaly,” serving as a case study for investor education. The Chinese market logic is “steady progress” — lively but orderly; open to innovation but with risks borne by investors.

Meme coins live in a third world

The truth of crypto trading is: it is neither regulated by U.S. securities laws nor under the jurisdiction of China’s CSRC. It is a lawless zone — a financial laboratory self-organized by code, liquidity, and community narratives.

Here, the American-style social speculation mechanism (information explosion + collective frenzy) bizarrely mixes with grassroots wealth psychology (resonance + community participation).

Exchanges are no longer neutral platforms but “narrative generators”; KOLs are no longer mere spectators but “price amplifiers”; retail traders cheer themselves on within algorithmic cycles, only to consume themselves.

The most fundamental change is: prices are no longer determined by cash flow but by the speed of narratives and the density of consensus. We are witnessing the birth of a new form of capital — “emotion capital.” It has no financial statements, only cultural symbols; no company fundamentals, only consensus curves; it does not pursue rational returns but emotional explosions.

Do data lie?

In the first nine months of 2025, 90% of top Meme coins experienced market cap collapses. In Q2, 65% of new tokens lost over 90% of their value within six months. It’s like a digital gold rush — most people lost everything, only those selling tools profited.

The question is: when money starts telling stories, the global financial logic is being fundamentally rewritten.

In traditional markets, prices reflect value. In crypto markets, price creates value. This is the extreme of decentralization, and possibly the limit of irresponsibility. When narratives swallow cash flows and emotions become assets, each of us is a participant in this experiment.

The real issue is not the rise and fall of coin prices

The Web3 industry stands at a crossroads: continue to indulge in short-term “emotion capitalism” frenzy, or move toward long-term construction of a “value-driven ecosystem”?

The way forward requires: strengthening community governance, introducing transparent regulatory frameworks, and establishing investor education mechanisms. Only then can decentralization truly empower global financial fairness, rather than becoming tools for harvesting retail investors.

Next time you see a KOL wildly promoting a “hundredfold coin,” ask yourself: Am I participating in financial innovation, or am I paying for someone else’s wealth freedom?

When money starts telling stories, what you need most is not FOMO but calm reflection.