Original Author: hitesh.eth

Translation｜Odaily Planet Daily (@OdailyChina)

Translator｜CryptoLeo (@LeoAndCrypto)

“A certain whale made a profit of 289 times on SPX,” “Smart money addresses traded GOAT for a profit of 117 times, and GNON for a profit of 855 times”…

“Murad: Memecoins are a sign of maturity in the crypto industry,” “Zhu Su: Memecoin infrastructure makes tokenization of everything possible,” “Arthur Hayes: Memecoin GOAT may reach a market value of $1 billion”…

SPX, GOAT, GNON—recent major events in the industry, aside from BTC reaching $69,000, include the daily emergence of Memecoin wealth myths. With solid on-chain data and the dissemination by industry leaders, Memes have evidently become the hottest track recently. Crypto KOL hitesh.eth published an article summarizing “the cognitive and social recognition process of traders from encountering to believing in Memecoins.” Below is the full content, translated by Odaily Planet Daily:

The formation of the “Memecoin cult” follows a similar cognitive and social development process as other cults, driven by financial losses, cognitive attachment, and social recognition gained through the cryptocurrency market and community.

Here is a breakdown of the different cognitive stages in the creation of the Memecoin cult:

1. Disillusionment with Utility Coins—Loss and Distrust

An individual's journey begins with losses in utility coins or venture-backed projects, which is also where the initial cognitive shift occurs:

Cognitive Dissonance—People believe in the utility or long-term value of these utility tokens, but after experiencing losses, their thoughts fall into conflict. They believe these assets can yield returns, yet reality does not meet their expectations.

Loss of Trust—Disappointment in the prospects of these utility tokens leads to a loss of confidence in them (whether venture-backed or utility-based projects), triggering a psychological need for a different narrative to explain why they incurred losses.

Seeking Redemption—After disappointment, people's thoughts begin to shift, gradually accepting new ideas, especially those promising faster or more significant financial gains. This openness lays the groundwork for their eventual turn to Memecoins.

2. Success of Memecoins—Reinforcing Beliefs Through Gains

Next, people make money trading Memecoins, leading to an emotional shift in their cognition:

Comfort and Recognition—Profiting from Memecoins after losing money on utility coins feels like validation. People begin to associate Memecoins with success, triggering confirmation bias: they start to believe that Memecoins are not only profitable but also a reasonable alternative to utility coins.

Bias Reinforcement—At this stage, the brain begins to form a narrative that Memecoins will thrive. Despite the lack of fundamental support, the bias shifts to viewing them as a new pathway to financial success, without needing to think deeply about the utility of Memecoins; profits and emotional release are sufficient proof.

3. Social Frustration—Struggling to Convince Others

After experiencing gains, people begin to promote the new narrative of Memecoins but face resistance:

Inability to Clearly Articulate Vision—Although individuals believe in the potential of Memecoins, they struggle to effectively communicate their vision to others, possibly due to the lack of logical theory behind Memecoins, leading them to have only emotional beliefs rather than logical ones.

Social Conflict—Resistance from others can be frustrating. People seek social recognition for their new beliefs, but without external validation from peers, this belief remains personal and internal, prompting them to double down on their beliefs and continue to promote Memecoins vigorously on social media.

Cognitive Barriers—The more individuals are rejected by others, the more entrenched their beliefs become. At this stage, thoughts begin to seek external reasons to explain why others do not understand what they “believe” in.

4. Meeting the Memecoin “Master”—Emotional Connection

A turning point occurs when a charismatic Memecoin theorist emerges and provides a compelling description of the future of Memecoins:

Emotional Appeal—The Memecoin theorist offers a knowledge framework that individuals lack to support their beliefs, making sense of the existing chaos and speculative world of Memecoins and explaining the future vision of Memecoins.

Personal Connection—After meeting this Memecoin theorist, individuals find similarities in the narratives they propagate, creating an emotional bond. The theorist's backstory resonates emotionally, reflecting the thoughts and experiences individuals have encountered—financial losses, disillusionment, and redemption through Memecoins. This emotional connection solidifies trust in the theorist's viewpoints.

Cognitive Closure—Psychologically, individuals feel a sense of closure. The theorist's narrative resolves the internal conflict between past losses and current gains, providing a structured way to explain why Memecoins are the future. The theorist's framework becomes the structure of the individual's belief system.

5. Evangelizing on Social Media—Dopamine Rush

As individuals begin to promote the ideas of this Memecoin theorist on social media, their influence starts to expand, creating powerful psychological reinforcement:

Dopamine Feedback Loop—Every time individuals receive likes, comments, or new followers on social media, their brains receive dopamine stimulation. This reward system reinforces the behavior of spreading the theory, making the brain feel the effectiveness of external recognition.

Reinforcement of Memecoin Gains—If the price of Memecoins rises during this period, individuals gain additional recognition, further solidifying their beliefs in Memecoins and the theorist. Thoughts begin to link financial success with the dissemination of ideology, forming a powerful feedback loop of financial and social returns.

Social Identity Transformation—As social media influence expands, individuals begin to see themselves as promoters or advocates of Memecoins, intertwining their sense of identity with the success of Memecoins and the theorist's ideas.

6. Formation of the Memecoin Cult—Cult Leaders and Shared Belief Systems

Finally, when others with similar biases and frustrations find the same Memecoin theorist, individual beliefs become part of a broader faith:

Finding the Cult Leader—Others who have lost faith in utility coins and are optimistic about Memecoins eventually find the same charismatic cult leader, generating a large following around the leader, creating a community of faith, and individuals realize they are part of a larger belief community than themselves.

Shared Belief System—The Memecoin worship revolves around a shared belief in the theorist's ideas, the profitability of Memecoins, and the emotional and financial success they create. The theorist becomes the center of this belief system, providing cognitive and emotional validation for the collective bias of the group.

Echo Chamber and Group Reinforcement—As more people join the movement, the group becomes an echo chamber, with members continuously reinforcing each other's beliefs in Memecoins. The theorist's ideas become almost sacred and unquestioned, and individual thoughts now operate within a closed system, rejecting dissenting opinions, making the collective belief in Memecoins even stronger.

7. Cult-like Behavior—Complete Cognitive Commitment

At this stage, individuals are fully committed to the Memecoin movement:

In-group/Out-group Thinking—Individuals now view Memecoin believers as “in-group” and anyone who doubts Memecoins as “out-group.” Thoughts begin to protect the cult's belief system, excluding skeptics and doubling down on the narrative of Memecoins.

Cognitive Barriers and Social Identity—Individual identity is now inseparable from the Memecoin movement. They derive self-worth from social media influence and the performance of Memecoins, while the charismatic leader's ideas are seen as absolute truth.

Ongoing Dopamine Rewards—Individuals continue to receive regular dopamine stimulation from social media interactions and the price fluctuations of Memecoins, making it increasingly difficult to detach from the belief system.

In this process, an individual's thoughts shift from financial disillusionment to an emotional connection with the charismatic leader, followed by cognitive recognition of their biases, ultimately leading to a complete cognitive and social commitment to the worship of Memecoins.

This cycle is driven by emotional, social, and economic reinforcement, making it a powerful feedback loop that is difficult to break.

The Memecoin cult operates as a shared belief system, providing both economic hope and a sense of social belonging, all driven by its core theorist.

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