Inside the Degen Mind: Understanding Crypto Communities and Why They Are the Way They Are

by Lisa de VilOctober 4th, 2024

Too Long; Didn't Read

- Crypto space is emotionally charged, with tribalism seen mostly online. - Younger users are attracted by the potential for financial freedom. - Crypto jargon like "HODL" and "wen lambo" reflects the community’s shared culture. - Real-life experiences show more competition than tribalism at events. - Community-driven marketing and decentralized projects fuel engagement. - Users see tokens as a form of identity, contributing to the sense of belonging within the crypto ecosystem.

featured image - Inside the Degen Mind: Understanding Crypto Communities and Why They Are the Way They Are

My friend and I were chatting over a cup of coffee on a cozy day in Singapore, with pale sunlight filtering through the thick, cotton-like clouds. We sat outdoors by the river, just a day after Token 2049 had concluded. My friend, a man in his 40s, was born in Hong Kong but raised in Australia. He spoke with an enthusiastic tone, reflecting his background in finance and entrepreneurship, particularly in digital payments. Over the past few days, he had attended several blockchain side events, brainstorming ideas for his new project focused on B2B carbon credits registered and delivered via blockchain. As we talked about the crypto space, he commented on how emotional the environment felt.

“It’s pretty emotional, isn’t it? Crypto. I see people on X supporting and trashing projects like it’s the FIFA World Cup. Why do you think that is?” he asked.

“Yeah… probably because everyone has money invested in it,” I responded instinctively, though I doubted the accuracy of my answer even as the words left my mouth.

“No, there’s more to it. I’ve never seen Meta stockholders trash Google stockholders like this. So, do you have any insight on who might win this blockchain race?” he pressed.

“Not really. It’s fascinating, though, isn’t it? The very essence of blockchain is decentralization—it’s not going to be like traditional sectors. It won’t be dominated by just a couple of companies,” I replied.

“So… why all this?” he asked again.

I shrugged, frustrated with myself for not offering a clearer answer. His question lingered in my mind, especially as an active crypto enthusiast with experience as a community manager.

Tokens Over Timecards: Why Crypto's 'Get Rich' Mentality Thrives

In many cultures, the idea of wanting to be "really rich without working" is often controversial and generally frowned upon. In the U.S., this mindset contradicts the cultural emphasis on hard work and the "self-made" narrative, where wealth is admired when it's the result of effort, innovation, or talent. Similarly, in East Asian cultures, values like hard work, diligence, and perseverance are deeply ingrained, making the desire to become wealthy without working seem irresponsible and disrespectful, especially in societies where long working hours are the norm. In some Middle Eastern societies, accumulating wealth through inheritance, investments, or family businesses is more accepted. However, even here, openly aspiring to wealth without effort can still be seen as lazy or ungrateful. Yet, the sentiment of “I want to get rich by just holding these tokens” is precisely what crypto users frequently discuss on social media.

This “get rich without working” mindset is more normalized within the crypto social media space, where 60%-70% of users are aged 18 to 34. Most of these users are from Asia, a region notorious for its demanding work culture, followed by North America and Europe, where approximately 60% of people live paycheck to paycheck (Deloitte, 2024). Financial insecurity is a prevalent concern. For added context, Cigna's 2022 survey revealed that an overwhelming 97% of 18-34-year-olds reported experiencing burnout, with more than half viewing their work as purely transactional, and nearly 48% planning to change jobs within the year. In a world where work fails to meet the mental, emotional, and financial needs of this younger generation, the crypto space offers a platform where they can freely express their desire to become wealthy without traditional labor.

It's worth noting that labeling cryptocurrency users as burnt-out Gen Z and Millennials simply seeking an easy path to wealth is misleading. According to research by Jose Campino and Shiwen Yang in Decoding the Cryptocurrency User: An Analysis of Demographics and Sentiments, 51.9% of respondents with cryptocurrency experience reported earning over $5,000 per month, while 16.9% earned between $3,000 and $5,000 per month.

Euphoria, Despair, Repeat: The Emotional Language of Crypto

The crypto social media space is saturated with passionate users who fiercely support or attack various projects. Crypto-specific jargon, often written in all caps and paired with outrageous memes, dominates these discussions. When a token's price starts to surge, phrases like “To the Moon” (expressing the hope that a cryptocurrency's value will skyrocket) and “Ape in” (referring to investing large sums into a cryptocurrency without much research) become widespread, signaling excitement and euphoria over the potential for massive gains.

In contrast, during market crashes, harsher terms like “Rekt” (derived from "wrecked," indicating a significant financial loss) and “SCAM” (implying a fraudulent project deceiving investors with false promises) flood the channels, expressing panic and despair. Amidst these highs and lows, expressions like “HODL” (a misspelling of "hold," meaning to keep cryptocurrency despite market dips) and “wen lambo” (a phrase asking when someone’s holdings will be valuable enough to buy a Lamborghini, symbolizing wealth) coexist, blending hope and frustration.

This shared jargon connects users across different languages and countries but also reinforces the impression that the crypto space is aggressive, emotionally charged, and sometimes greedy.

The emotionally charged engagement among the young user base is fueled by real-life stories of those who became rich by getting in early on company stocks. For example, graffiti artist David Choe, who accepted Facebook stock as payment in 2005, saw his shares soar to an estimated $200 million when Facebook went public in 2012. Similarly, rapper 50 Cent took a minority equity stake in Vitaminwater instead of a standard endorsement fee, reportedly earning $60 to $100 million when Coca-Cola acquired the company in 2007.

For early cryptocurrency investors, this is the dream—an overnight success story. But these tales are far simpler when told in retrospect. For those actively seeking financial freedom through crypto, the journey is often an emotional roller coaster. Social media is filled with raw accounts of people who “lost everything” or “gained 100x” overnight, frequently backed by screenshots that heighten the anticipation, fear, or hope of others still “hodling” their tokens.

To the traditional observer, holding onto tokens—especially meme coins, which lack intrinsic value or utility beyond speculation—seems unsettling. They view wealth as finite, and stories like David Choe’s appear to have the same odds as winning the lottery (about 0.0000009%). Based on traditional currency models, where central banks like the Federal Reserve or the European Central Bank manage money supply in response to factors like inflation and GDP growth, this skepticism makes sense.

However, crypto operates differently. Digital currencies are continuously created by countless teams, aiming to accumulate wealth for themselves and their communities. The odds of wealth landing in someone's hands are much higher, especially given that the crypto market runs 24/7, compared to the limited 32.5 hours a week of traditional stock trading. This disparity between traditional finance and crypto narrows the gap between extraordinary success stories and the average crypto enthusiast—or "degen." After all, don’t most of us know at least one person who made a fortune and retired early just by investing in the right cryptocurrency at the right time?

The rapid and always-on nature of cryptocurrency trading amplifies users' hopeful emotions beyond mere financial investment. While it's unconventional for people to share stories of loss and failure with such intensity, the Excitation Transfer Theory explains how the thrill of potential gains directly transforms into the deep despair of loss within the transparency of Web 3 social media, making this space exceptionally emotional.

From Competition to Connection: The Real Reason Behind Crypto Tribalism

Alongside the intense emotions, my friend observed strong tribalism in the crypto space, similar to the fervor seen during the FIFA World Cup. However, when I asked if he encountered any tribalism during his offline event experiences, his response was surprising:

"Hey Vince, GMGM."

"GM, Lisa."

"Quick question for you. Did you notice any tribalism at the events you attended? Like people trashing others for supporting different tokens? You mentioned seeing a lot of it on X."

"Competition—yes. Tribalism… No. Every event showed an amicable degree of competition.

Interestingly, the tribalism that's so prominent on crypto X is largely an online phenomenon. In real life, most 'Degens' or 'Cryptobros/gals' are quite friendly and accepting of each other, regardless of the tokens they hold. Although heated debates over bullish (expecting prices to rise) and bearish (expecting prices to drop) sentiments are common at offline events, they usually stem from a desire to exchange knowledge and gain different perspectives.

While individual motivations for engaging in tribalism vary, this behavior often stems from community-driven marketing strategies. Blockchain projects primarily generate revenue through transaction fees and staking, meaning the more users on the network, the more successful the project becomes, leading to potential increases in token prices. This drives token holders to spread awareness and create buzz on social media, aiming to capture the interest of newcomers. If you've come across at least one token ticker on X, it's a testament to the effectiveness of these methods. Blockchain projects thrive on decentralization—the distribution of control and decision-making across the network. Consequently, community-driven initiatives are widely embraced, fostering collaborative ecosystems, as seen in NFT projects like CryptoPunks and "The Currency." A recent case study involving Solana’s $EGG token also demonstrates how community support can significantly influence price movements.

Beyond being a marketing tactic, supporting a particular project adds a layer of fun and excitement to the crypto experience. It's akin to cheering for a favorite sports team or being a devoted fan of a K-pop group. A token ticker becomes a badge of identity, allowing users to connect with new online "frens" (a playful term for "friends") and feel a sense of belonging within the community. This shared token symbol fosters connections with others who share similar bullish hopes, creating a sense of camaraderie and community in the crypto space.

Summary: How Crypto Reflects Our Search for Freedom and Identity

Although the cryptocurrency community can appear aggressive, emotional, and even obnoxious at times, understanding the larger context helps shed light on why it thrives in this manner. The demographics of the average crypto user, predominantly 18 to 34 years old, mostly located in Asia, the U.S., and Europe, play a significant role in shaping this space. Many of these individuals exist in economies with intense work cultures, where they feel trapped in jobs that offer little fulfillment or long-term financial security. In this landscape, crypto provides an alternative—a chance to dream of escaping this grind, to achieve wealth on one’s own terms.

This emotional connection to the dream of financial freedom, combined with the tribal excitement of supporting a token as one might support a sports team or a pop idol, is what gives the crypto space its uniquely intense atmosphere. Users don’t just see themselves as investors; they view themselves as active participants in a financial revolution, with each token they hold representing not just a potential profit but also a piece of their identity and aspirations. The emotional highs and lows, the tribalism, and the meme culture aren’t just noise—they’re a testament to how deeply invested people are, both financially and emotionally, in this space.

Ultimately, despite the chaos and fervor, the crypto community represents a generation’s desire to break free from traditional financial systems and create something that belongs to them. So, while outsiders might see an irrational, overhyped, and emotional group, those within the space recognize it as a shared journey—a pursuit of dreams, financial liberation, and the hope for a better, decentralized future.

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