Cryptocurrency Financial Advisors

Propaganda in the Crypto Market? A Deep Dive into Meme Token Culture

Meme Token Propoganda?

2021 saw an unprecedented rise in “meme investments” leaving an unmistakable impact in history, and the future. Meme Investments are assets where much or all of the underlying value comes from a viral joke. January 2021 saw the first meme bull run with GameStop and Dogecoin winning big on their respective platforms. There is much concern over the future of meme stocks and meme tokens, which are much more difficult to stop. Regardless of the platform, however, investors now recognize memes as a powerful tool comparable to propaganda. From a profit-driven mindset, we can look at the factors that historically made propaganda powerful to determine which meme tokens are poised for success.

There are many propaganda techniques, but for the purpose of this discussion, we will focus on the three that are not only used for propaganda, but are also common choices for advertisers. The first is ‘Appeal to Authority’, where the appeal is made by one or more figures of influence. Second is ‘Appeal to Emotion’, where appeal comes from a specific emotion creators and influencers attempt to induce. Finally, ‘Appeal to Prejudice’ is where the appeal comes from the desire to end an existing societal structure. If memes are fundamentally driven by propaganda, then a successful meme investment is contingent on the utilization of one or more of these appeals.

Effective Appeal to Authority causes a swift price increase, albeit often temporarily. Crypto allows influencers to leverage their following for profit–a practice often known as a “pump and dump”– where the price is artificially increased in order to start a strong bullish movement only to later sell it off. In 2017 boxer Floyd Mayweather and musician DJ Khaled endorsed the crypto startup Centra Tech, whose owner would later be sentenced eight years for an Illegal ICO. More recently, ‘Tron’ was endorsed by an ensemble of influencers including Lindsay Lohan, Ne-Yo, Amanda Cerny, and Marques Brownlee. The Tron CEO denied coordination, but Brownlee later released an email from a Tron representee outlining a sponsorship. The power of authority can be abused but it is not always a result of malicious intentions. The environmentally concerned tech entrepreneur, Elon Musk has openly gone back and forth over the ethicacy of crypto mining, which caused prices to swing in correlation with his opinion. In many ways, mass adoption of crypto requires a trusted figure to support the technology, which itself does not require trust. Remember that a normal tokens value is in the tech, unaffected by popularity, while meme token values are dependent on popularity. Compared to other techniques, Appeal to Authority is perhaps the riskiest since the ‘appeal’ hinges on authorities that are not obligated to be ethical or HODL.

Influencers start trends, but emotions make trends last. Historically propagandists and advertisers use dogs to induce emotion. In crypto, there is a substantial market for ‘dog tokens’ including the Shiba Inu Token, named after the popular Japanese breed. Shiba Inu (SHIB) holds a 2-billion-dollar value despite the bear market, over a 120x increase from the beginning of April 2021. In addition to Shiba Inu, many dog tokens have amassed value solely through the virtue of the token name. Regardless of the emotion induced, emotional appeal is a strong technique to conjure and secure meme popularity.

Appeal to Prejudice is perhaps the most powerful technique, as it is most likely to trigger the bandwagon effect that brings memes ‘to the moon’. Achieved by the GameStop ‘short-squeeze,” a bandwagon of retail investors risked big losses to expose the inner workings of the US financial system, evident by the brokerage ‘Robinhood’ removing the ‘buy’ option. Weeks after the GameStop fiasco, Elon proposed that since ‘fate loves irony’ the crypto made as a joke—Dogecoin—could be a unit of exchange superior to the USD. Likewise, the Chinese crypto crackdown resulted in the creation of Losercoin, created by two self-proclaimed “broke losers” in China to combat the Chinese mandated currency. The Japanese alternative, MonaCoin seeks a financial future that began after a plot of land in Nagano was bought with the currency. Appeal to Prejudice is maybe the only appeal that persuades investors to put money in willing to take a substantial loss just to send a broader message. Cryptocurrencies nature attracts users seeking a financial revolution, many of whom would happily watch the current systems overthrown by memes.

Propaganda appeals can boost a meme token value, but the best value meme token will successfully utilize as many of these appeals. Dogecoin, for instance, exists at the intersection of all three appeals, since many influencers are proponents of it, dogs induce emotions, and it is poised to give the Fed a run for its money, since Doge would be among the last assets purchased by a large bank. The original Doge meme went viral in 2013 and nearly 8 years later—eternity in internet time —still retains its relevance. The history of Dogecoin and the meme itself are telling of its future. Even though Doge was the first meme token, today’s crypto market proves it certainly will not be the last. While there is limitless potential to the width of the meme market, the biggest winners will accrue value in similar fashion to propaganda.

By Simon DeCapua

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