The meme coin craze in the bear market was born out of Vitalik’s joke

How many people in the cryptocurrency circle are worried about the sideways market?

The meme community is quite lively. In the past week, a number of new meme tokens have emerged in the crypto market, bringing considerable returns to early investors, with some even reaching a market value of more than $50 million.

This time it is not animal coins or food coins such as cats and dogs. Some people in the currency circle have turned their attention to an unexplored and rather niche funny field - foreign words.

THE — one of the most traded tokens on decentralized exchange Uniswap in recent days, has seen around $10 million in on-chain trading volume and more than 5,000 holders as of Friday afternoon.

So how did THE come about? It all started with a tweet from Ethereum co-founder Vitalik Buterin on October 14.

Vitalik Buterin joked: "Someone should start a project called 'THE Protocol' so that those scammers can say 'Look, so-and-so mentioned THE'! No matter what anyone says, it can be used for hype."

Not long after this tweet was published, THE project came into being, and the prediction did not disappoint: users began to issue and trade THE tokens on Uniswap.

It was followed by other word-derivative projects such as THIS, THEY, and THAT, all claiming dozens of iterations on blockchains such as Ethereum, BNB Chain , Solana , and others.

Anyone can call a smart contract and issue a token on Ethereum (or another blockchain) for a few cents, and the existence of decentralized exchanges means that tokens can be issued instantly, provided liquidity, and traded shortly afterwards.

The premise is unimportant: if you want to make money, expect it to stir up some waves in the “shitcoin” community.

In the past few days, THE has surged more than 1,000%.

In the process, speculators even began betting on "DIE" - a synonym for "THE" in German.

Its creation was also inspired by Vitalik’s tweet on October 20: “THE in German is DIE, and DIE translates to ‘death’ in Chinese, which sounds funnier.”

The DIE token attracted hundreds of thousands of dollars in liquidity. DEXTools data shows that DIE's 24-hour increase once exceeded 5,500%, with liquidity exceeding $400,000.

Why are meme tokens like this popular?

Several professional investors told CoinDesk that memecoins and their narratives will always be part of the crypto ecosystem.

“Whether we like it or not, meme coins are an important part of the crypto trading landscape, ” James Wo, founder of crypto fund DFG, told CoinDesk. “With volatility so low for top tokens like bitcoin and ethereum, it’s natural that traders would look for opportunities elsewhere.”

“Meme trading is a risky way to try to seek outsized returns, but when successful, the upside can be very large. Therefore, even in a bear market, some meme tokens will rise significantly, even if only in the short term,” Wo explained.

The crypto market is "half sea and half fire". Serious investors and developers build financial services based on smart contracts to allow global users to trade, borrow assets and make loans in a permissionless environment, in line with the spirit of relying on technology rather than third parties to obtain financial services.

The other half are crazy meme artists. Data shows that the market value of dog coins, cat coins, food coins, and meme coins is as high as billions of dollars, and each evolution is more "outrageous" than the previous generation.

THE isn’t the only instance of crypto creating a “shitcoin” market.

Earlier in January, Grimacecoin tokens, created after a joke tweet from McDonald’s, surged 285,000% in a few hours as speculators seized on the opportunity to make money in the tepid crypto market. The hype soon died down — nearly all of GRIMACE was down 99% a few weeks later, with the current price being just $1.