GMCI price indices show that major meme coins are losing their upward momentum and DeFi altcoin projects are showing stronger growth. One analyst says that market participants are likely to return to the underlying tokens.
While the largest meme coins have lost their upward momentum since mid-November, DeFi altcoin projects are on the rise. The GMCI memecoin index shows that the prices of the largest meme coins by market capitalization have been trending sideways in the past few weeks. The index is currently at 508.5 levels. The index, which made significant gains at the beginning of November, has been fluctuating around 500 since mid-November. The index, which rose from about 274.5 points on November 1 to 523.5 points on November 15, has remained stable thereafter. Min Jung, a research analyst at Presto Research, said:
“The memecoin market appears to be overheated. Exchange listings boosted token prices in mid-November, but then investor fatigue from controversial platforms like Pump.fun grew. Pump.fun, a major memecoin launch platform on Solana, disabled its live streaming feature after receiving numerous reports of harmful behaviors including self-harm, child and animal abuse.”
“Investors are now shifting their focus from memecoins to AI and other niches. They are also turning to micro-cap tokens looking for higher yields,” Jung said.
Meanwhile, the GMCI index on top DeFi tokens has seen a significant increase in the past two weeks. The GMDEFI index has risen by 35% from 82.47 on November 14 to 111.43 at the time of writing. Arthur Cheong, founder and CEO of crypto asset investment firm Defiance Capital, said:
“We are seeing money shifting to EVM Chain based DeFi projects like ETH, AAVE, ENA and ENS.”
Cheong suggests that these developments are interconnected. Data shows that memecoin investors are shifting their capital to DeFi projects. He also notes that extreme memecoin rallies have ended of their own accord. Investors are now finding more value in fundamentals-based tokens. Positive sentiment towards DeFi altcoin projects has gained momentum since Donald Trump’s victory. This is fueled by the spread of pro-crypto policies supporting a decentralized financial future. Presto’s Jung interprets recent market trends as a broader “back to basics.” He also notes that market participants are prioritizing projects with strong fundamentals:
“The expected interest rate cut cycle supports the ‘DeFi 2.0’ thesis, with lower interest rates driving capital into DeFi projects. This explains the recent surge in DeFi tokens.”