With the Federal Reserve embarking on an easing cycle, memetic tokens are poised to emerge as strong contenders, potentially surpassing the decentralized finance (DeFi) sector in the fourth quarter. This optimistic forecast comes from Toe Bautista, a research analyst at GSR, a crypto trading and liquidity provider.
Bautista suggested to Blockworks that a renewed surge in speculative interest could drive memetic tokens to new heights.
“The continued strength of memetic tokens may be fueled by the recent spike in speculative activity.”
Memetic Tokens vs DeFi
Moreover, Bautista highlighted that memetic tokens might outshine DeFi, given the persistent regulatory uncertainties looming over the DeFi sector in light of the upcoming US elections.
“Conversely, DeFi finds itself in a precarious situation. A victory for President Trump could lead to relaxed regulations, potentially benefiting DeFi, while a win for Vice President Harris might intensify regulatory challenges.”
In essence, memetic tokens could experience a significant surge in the short term, but their ability to outperform DeFi in the long run hinges on the outcome of the US elections.
At the time of writing, Popcat [POPCAT] recorded unprecedented gains of nearly 10,000% year-to-date (YTD). Similarly, dogwifhat [WIF] and Pepe [PEPE] showcased exceptional performance, reflecting triple-digit gains over the same period.
Nonetheless, a recent report by Bernstein favored the DeFi sector for potential growth, particularly as traditional finance (TradFi) interest rates decline.
Bernstein analysts projected that DeFi yields could surpass 5%, surpassing returns from US money market funds and boosting prominent projects like Aave [AAVE], Uniswap [UNI], and Aerodrome Finance [AERO].
Despite this, memetic tokens continue to hold a strong market position. Having dominated in the first and second quarters, memetic tokens still lead the pack in YTD performance. Conversely, DeFi ranks fifth, with an average gain of 51% based on Artemis data.
The Federal Reserve’s recent policy shift is expected to fuel speculation around memetic tokens and raise interest in DeFi yields, potentially enhancing returns for both sectors. Nevertheless, the impact of the upcoming US elections on the performance of these assets remains uncertain.