Three Crypto Narratives That Peaked, Three Making a Comeback: Will Memes, Ordinals, DeFi Still Rule Earnings?
The crypto market in 2023 is all about narratives. The hottest trends indicate higher returns from top three crypto narratives than Bitcoin and blue-chip portfolios.
Trends and narratives in crypto range from whole classes of assets to single tokens or overhyped projects.
Three Crypto Narratives Peaking in 2024
Three narratives stood out based on the trading volume of tokens and related assets. Meme activity is at a peak, with more than $600M in average daily volume per asset.
The second big class of tokens enjoying highly active trading are AI-based tokens. In the third spot, Liquid Staking Derivatives (LSD) on Layer 1 networks see active trading and transfers, mostly due to the added trend of re-staking.
However, highly active trading does not translate into positive returns. Hot trends are also riskier, and the tokens involved may experience extraordinary volatility. Risk-adjusted returns are a better measure of the most successful trends for investors. It turns out that older narratives, including Bitcoin, have a better risk-return profile compared to hotter trends.
Most trends had an overall positive return during the 2023 recovery and the successful Q1 of 2024. However, there is always demand for new asset classes that will grow while older trends stagnate.
Are Memes on the Way Out?
Based on Google searches, “meme tokens” peaked in March, indicating the widest possible interest of outsiders looking to buy in. All three top trends for meme, AI and LSD tokens show signs of peaking and leveling off.
The trend shift also affected market prices, as seen by the sector’s market capitalization. AI tokens, whether data-based or generative AI have dipped from their peak, and even their leading coins and tokens are lagging. Meme tokens as a whole remain volatile, and their performance hinges on older assets like Dogecoin (DOGE) and Shiba Inu (SHIB), with the newest launches hardly reflected in trades. LSD tokens are also at the tail end of a boom cycle, after the initial hype about re-staking Ethereum.
Which Trends Signal Emerging or Returning
Some of the older use cases for blockchains are making a return now with faster tech and potentially higher market liquidity.
Data for smaller trends shows a return to Friend-Tech, Privacy, and Account Abstraction.
Friend Tech is a return to the idea of a crypto-based social media, and may turn into an immediate hot trend. The leader of this trend is Friend.tech, the latest site to connect existing social media accounts with a Base blockchain wallet.
https://twitter.com/friendtech/status/1783917297523945588
Friend.tech will also launch its token airdrop, while also rewarding users with social media points. For now, the future of Friend.tech is uncertain, but new crypto social media may follow.
Privacy coins and tokens may be making a return, despite avoidance on the side of centralized exchanges. With DEX trading still expanding, most blockchains are now adding ZK-snarks and privacy features. The privacy trend may be driven by extra regulations and scrutiny of crypto users. In the short term, the TREAT network by ShibaInu will introduce privacy features to a wide audience of SHIB holders.
https://twitter.com/Crypto_Crib_/status/1782330735979810945
The third niche trend, account abstraction, is about the creation of more user-friendly wallets. Web3 projects, games and GameFi projects aim to offer a seamless experience with an integrated wallet.
Right now, account abstraction is still being worked on, with many smaller startups suggesting solutions. But if the trend takes off, there may be clear winners. Account abstraction aims to bring a unified identity for old crypto users to shift seamlessly between NFT markets, DeFi locations, or other connections where a wallet is needed.
Trends Work Better in a Bull Market
As with all trends, the bull market is the biggest indicator of success. But even in that context, trends help to bring out the winners for every bull cycle. Initially seen as just a fad, many trends in crypto eventually become essential parts of the industry, known for their reliability and easy availability.
Read More
Three Crypto Narratives That Peaked, Three Making a Comeback: Will Memes, Ordinals, DeFi Still Rule Earnings?
The crypto market in 2023 is all about narratives. The hottest trends indicate higher returns from top three crypto narratives than Bitcoin and blue-chip portfolios.
Trends and narratives in crypto range from whole classes of assets to single tokens or overhyped projects.
Three Crypto Narratives Peaking in 2024
Three narratives stood out based on the trading volume of tokens and related assets. Meme activity is at a peak, with more than $600M in average daily volume per asset.
The second big class of tokens enjoying highly active trading are AI-based tokens. In the third spot, Liquid Staking Derivatives (LSD) on Layer 1 networks see active trading and transfers, mostly due to the added trend of re-staking.
However, highly active trading does not translate into positive returns. Hot trends are also riskier, and the tokens involved may experience extraordinary volatility. Risk-adjusted returns are a better measure of the most successful trends for investors. It turns out that older narratives, including Bitcoin, have a better risk-return profile compared to hotter trends.
Most trends had an overall positive return during the 2023 recovery and the successful Q1 of 2024. However, there is always demand for new asset classes that will grow while older trends stagnate.
Are Memes on the Way Out?
Based on Google searches, “meme tokens” peaked in March, indicating the widest possible interest of outsiders looking to buy in. All three top trends for meme, AI and LSD tokens show signs of peaking and leveling off.
The trend shift also affected market prices, as seen by the sector’s market capitalization. AI tokens, whether data-based or generative AI have dipped from their peak, and even their leading coins and tokens are lagging. Meme tokens as a whole remain volatile, and their performance hinges on older assets like Dogecoin (DOGE) and Shiba Inu (SHIB), with the newest launches hardly reflected in trades. LSD tokens are also at the tail end of a boom cycle, after the initial hype about re-staking Ethereum.
Which Trends Signal Emerging or Returning
Some of the older use cases for blockchains are making a return now with faster tech and potentially higher market liquidity.
Data for smaller trends shows a return to Friend-Tech, Privacy, and Account Abstraction.
Friend Tech is a return to the idea of a crypto-based social media, and may turn into an immediate hot trend. The leader of this trend is Friend.tech, the latest site to connect existing social media accounts with a Base blockchain wallet.
https://twitter.com/friendtech/status/1783917297523945588
Friend.tech will also launch its token airdrop, while also rewarding users with social media points. For now, the future of Friend.tech is uncertain, but new crypto social media may follow.
Privacy coins and tokens may be making a return, despite avoidance on the side of centralized exchanges. With DEX trading still expanding, most blockchains are now adding ZK-snarks and privacy features. The privacy trend may be driven by extra regulations and scrutiny of crypto users. In the short term, the TREAT network by ShibaInu will introduce privacy features to a wide audience of SHIB holders.
https://twitter.com/Crypto_Crib_/status/1782330735979810945
The third niche trend, account abstraction, is about the creation of more user-friendly wallets. Web3 projects, games and GameFi projects aim to offer a seamless experience with an integrated wallet.
Right now, account abstraction is still being worked on, with many smaller startups suggesting solutions. But if the trend takes off, there may be clear winners. Account abstraction aims to bring a unified identity for old crypto users to shift seamlessly between NFT markets, DeFi locations, or other connections where a wallet is needed.
Trends Work Better in a Bull Market
As with all trends, the bull market is the biggest indicator of success. But even in that context, trends help to bring out the winners for every bull cycle. Initially seen as just a fad, many trends in crypto eventually become essential parts of the industry, known for their reliability and easy availability.
Read More