As the Fed’s easing cycle begins, Memecoin could return as one of the top performers, even surpassing the DeFi sector in Q4, predicts Toe Bautista, research analyst at GSR, a cryptocurrency trading and liquidity provider.

The renewed speculative interest could boost Memecoin's growth potential, Bautista said.

“Memecoin’s strength could continue thanks to the recent surge in speculative appetite.”

Memecoin vs. DeFi

He added that the sector could outperform DeFi as the segment remains rife with regulatory uncertainty ahead of the US election.

“On the other hand, DeFi is in a difficult position. If Trump wins, there is a possibility of loosening regulations, paving the way for DeFi's dominance, while if Harris wins, it could further increase hostility.”

In short, Memecoin is likely to enjoy a strong short-term rally, but its outperformance over DeFi depends on the outcome of the US elections.

As of now, Popcat [POPCAT] has topped the charts with nearly 10,000% gains. dogwifhat [WIF] and Pepe [PEPE] are also exceptions with triple-digit gains during the same period.

However, a recent report from Bernstein has indicated that the DeFi sector has the potential to grow as interest in TradFi declines.

Bernstein analysts believe that DeFi yields could rise above 5%, surpassing US money market funds and igniting the potential of industry leaders such as Aave [AAVE], Uniswap [UNI], and Aerodrome Finance [AERO].

Still, Memecoin’s advantage remains strong in the market. After leading the rankings in Q1 and Q2, the segment remains at the top in terms of returns since the start of the year. DeFi, on the other hand, ranks fifth with an average gain of 51%, according to data provided by Artemis.

The Fed’s move will spur speculation in memecoins and increase market interest in DeFi yields, which could boost returns in these segments. However, how performance will actually be affected by the upcoming US election remains an open question.

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