The memecoin market has been in a lull in recent weeks due to waning investor interest. In contrast, DeFi altcoins have seen a rapid uptrend due to their strong fundamentals and capital flows. Currently, investors are turning to strong altcoin projects and the decentralized finance (DeFi) space.
The memecoin market has been on hold since mid-November. The GMCI memecoin index has been hovering around 500 points for the past few weeks. However, DeFi altcoins have recently regained investor interest by following a strong uptrend. The GMCI memecoin index has been moving sideways after rising to 523.5 points on November 15. The index, which was 274.5 points at the beginning of November, had shown a rapid increase in the first half of the month. However, following the increases experienced with the exchange listings of major memecoins in recent weeks, investor interest has decreased.
Presto Research analyst Min Jung said the memecoin market is “overheating,” adding that “investor fatigue and controversies surrounding platforms like Pump.fun have limited this rally.” Solana-based Pump.fun has shut down its livestream feature due to threats and reports of child and animal abuse seen during livestreams. These developments have led investors to focus on smaller projects and different areas.
DeFi altcoins have seen a strong recovery over the past two weeks. The GMDEFI index rose 35% from 82.47 points on November 14 to 111.43 points. Defiance Capital CEO Arthur Cheong noted that investors are shifting from memecoins to DeFi projects, saying, “There is a significant capital flow into EVM-based projects such as ETH, AAVE, ENA, ENS.”
Investors moving away from memecoin rallies and turning to DeFi projects and the strong fundamentals of these projects are among the factors supporting the rise of DeFi altcoins. In addition, Donald Trump’s possible re-election as US President has created a positive atmosphere for DeFi. The expectation that cryptocurrency-friendly policies will support the future of decentralized finance is further increasing this interest.
Presto Research’s Min Jung described this as a “return to basics.” “Investors are turning to projects with strong fundamentals. Also, the expectation of a rate cut cycle is accelerating the flow of capital into DeFi projects,” Jung said. This development is seen as a major catalyst that boosts the performance of DeFi altcoins.