Top memecoins have lost their upward momentum since mid-November, while DeFi tokens have surged, price data shows.
The GMCI memecoin index, which measures the performance of top meme tokens by market capitalization, shows that the aggregate price performance of major memecoins has been moving sideways over the past few weeks.
The index stood at 508.5 at the time of writing, continuing to fluctuate around the 500 level since mid-November after substantial gains earlier in the month. In the first half of this month, the index surged from around 274.5 points on Nov. 1 to 523.5 on Nov. 15.
“The memecoin market appears overheated, with exchange listings driving token price spikes in mid-November, followed by growing investor fatigue fueled by controversies like Pump.fun,” said Min Jung, research analyst at Presto Research.
Pump.fun, a major memecoin launchpad on Solana, recently disabled its live streaming feature after multiple reports of harmful and dangerous behavior on live streams such as threats of self-harm, child abuse and animal abuse.
“As a result, many memecoins have shifted focus to AI and other niches, while investors increasingly gravitate toward microcap tokens, seeking higher returns compared to larger-cap memecoins,” Jung added.
Meanwhile, the GMCI index on top DeFi tokens shows that they have grown significantly over the past two weeks. The GMDEFI index stood at 111.43 at time of writing, up 35% from 82.47 on Nov. 14.
“We’ve seen money moving back to ETH, DeFi projects deployed on the EVM chain such as AAVE, ENA and ENS,” said Arthur Cheong, founder, CEO and CIO of crypto asset investment firm Defiance Capital.
Cheong suggested that two things may be happening in tandem. Memecoin traders could be shifting capital to DeFi or extreme memecoin rallies could be nearing the end for their own reasons while traders find more value in tokens with fundamentals.
Positive sentiment surrounding DeFi has been gaining traction since Donald Trump’s reelection as U.S. President, fueled by hopes that pro-crypto policies could potentially pave the way for a decentralized future in mainstream finance.
Jung of Presto saw the latest market trend as a “broader rotation” back to fundamentals, with market participants prioritizing projects with strong foundations. “At the same time, the anticipated rate-cut cycle is supporting the 'DeFi 2.0' thesis, as lower rates channel capital into DeFi, driving the recent surge in DeFi tokens,” Jung said.
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