The Crypto Frenzy and Bloodshed During the National Day Holiday

During the National Day holiday, while the A-shares market was closed and investors were still queuing at scenic spots for photos, the crypto world was staging an even crazier drama.

In the ecosystem of a leading exchange, meme coins with names that sound like jokes saw their market caps multiply dozens of times in just a few days. Tokens like Meme4 and PALU allowed early investors to easily see their paper gains surpassing one million USD. The Chinese-speaking community was boiling with excitement, with various KOLs cheering and celebrating as if they had discovered a new continent.

The frenzy didn’t last long. Starting October 9, these coins began to plummet freely. Some dropped as much as 95% in a single day, over 100,000 traders were liquidated, with a total amount of $621 million.

The myth of overnight wealth quickly turned into retail investors’ blood and tears accounts.

I’ve seen scenes like this on Wall Street and Lujiazui.

American Playbook VS Chinese Mindset

Remember the retail stock surge in 2021 when retail investors pushed certain stocks up by thousands of times? Back then, the trading was genuine, information was fully disclosed, and it was ultimately classified as “part of the market.” The American logic is: Let the bubble happen because bubbles are catalysts for market evolution.

What would happen if this meme coin frenzy occurred on the US side of a major exchange? It could lead to the creation of new financial products, media outlets writing lengthy analyses about “retail capitalism,” and regulators possibly studying social media manipulation. But the final conclusion would be: this isn’t fraud; it’s a collective financial reaction driven by group sentiment.

In China, the story would be different.

If similar phenomena appeared on a compliant platform, regulators would quickly issue risk alerts, media would call for rationality, and the entire event would be labeled as “speculative abnormality,” becoming a case for investor education. The Chinese market’s logic is “steady progress” — excitement is allowed, but order must be maintained; innovation is welcomed, but risks are borne by individuals.

But Meme Coins Live in Another World

The harsh reality of the crypto market is: It is neither constrained by US financial regulation nor governed by any single institution.

It is a lawless zone, a gray financial experiment formed by code, liquidity, and narrative self-organization.

Here, overseas social speculation mechanisms (information diffusion + collective momentum) and domestic grassroots wealth psychology (resonance + community participation) blend in a fascinating way. Exchanges are no longer neutral platforms but “narrative creators”; KOLs are not mere spectators but “price amplifiers”; retail investors indulge in self-celebration and self-destruction within cycles of algorithms and consensus.

The fundamental change is: prices are no longer determined by cash flow but by the speed of narrative 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 doesn’t pursue rational returns, only emotional release.

Data Speaks

In the first nine months of 2025, 90% of top meme coins experienced market cap crashes. In Q2, 65% of new tokens lost over 90% of their value within six months.

It’s like the gold rush of the digital age—most prospectors lost everything, only those selling tools made a profit.

But that’s the core issue: when money starts telling stories, the global financial logic is being completely rewritten.

In traditional markets, prices reflect value; in crypto markets, prices create value.

This is both the ultimate decentralization and possibly the limit of de-responsibilization. When narratives replace cash flows, and emotions become assets, each of us is a participant in this experiment.

Where is the Exit?

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

The real way out requires: strengthening community governance, introducing more transparent regulatory frameworks, and establishing investor education mechanisms. Only then can decentralized technology truly empower financial fairness, rather than becoming tools for a few to harvest retail investors.

Next time you see a KOL wildly promoting a “hundred-bagger coin,” ask yourself: Am I participating in financial innovation, or just paying for someone else’s wealth freedom? When money starts telling stories, what you need most is not the anxiety of missing out, but the ability to think calmly.