- Memecoins could outperform DeFi in the short term.
- Fed interest rate cuts would boost memecoins and DeFi sectors.
As the Fed’s easing cycle begins, coins The decentralized finance sector could return to the top of the charts and even eclipse the decentralized finance sector in the fourth quarter, according to Toe Bautista, research analyst at crypto trading and liquidity provider GSR.
Bautista told Blockworks that a surge in speculative interest could bolster memecoins’ upside potential.
“Memecoin strength could continue due to recent surge in speculative appetite.”
Memecoins vs DeFi
He added that the sector could outperform DeFi as the segment was still plagued by regulatory uncertainty ahead of the US elections.
“On the other hand, DeFi finds itself in a delicate middle ground. A Trump election victory would likely lead to regulatory easing, providing potential outperformance for DeFi, while a Harris victory could lead to continued hostility.”
In short, memecoins could enjoy a massive rally in the short term, but the segment’s outperformance relative to DeFi depended on the outcome of the US elections.
Source: Artemis
Year-to-date (YTD), Popcat (POPCAT) is leading the charts with gains of nearly 10,000% at press time. dogwifhat (WIF) And Grandpa (PEPE) were also outliers with triple-digit gains over the same period.
However, a recent study by Bernstein report tipped the scales in favor of the DeFi sector for upside potential amid falling interest rates in the TradFi sector.
Bernstein analysts noted that DeFi yields could exceed 5%, beating US money market funds and boosting segment leaders like Aave (AAVE), Uniswap (UNI)And Financing of aerodromes (AERO).
That said, the gap between memecoins is still strong in the market. After dominating the rankings in Q1 and Q2, the segment still leads on a YTD basis. On the contrary, DeFi ranked fifth with an average of 51% gains per Artemis data.
Source: Artemis
The Fed’s change of course will boost speculation in memecoins and increase market interest in DeFi yields, which could boost returns in these segments. However, it remains to be seen how the upcoming US elections will affect performance.
