While the largest cryptocurrencies, Bitcoin and Ethereum, attracted the attention of investors with their performances, memcoins such as Dogecoin (DOGE) and Shiba Inu (SHIB) could not exhibit the expected performance.
Evaluating this situation at this point, Nansen analysts claimed that memecoins underperformed because investors focused on market leaders Bitcoin and Ethereum.
Speaking to The Block, Nansen analysts stated that it underperformed compared to BTC, ETH and rising altcoins in the same period.
“Memecoins underperformance is likely due to the current strength of underlying cryptocurrencies like Ethereum, diverting investor attention and capital away from them.
“Investors' addiction to social media trends related to cryptocurrencies such as Bitcoin and Ethereum further amplifies this effect.”
Apart from Nansen analysts, YouHodler Market Chief Ruslan Lienkha also evaluated this situation and said that most investors' interest is focused on Bitcoin and Ethereum due to spot ETFs that have been approved and have the potential to be approved.
“The post-approval ETF inflows of Bitcoin ETFs and the possible approval of Ethereum ETFs mostly encourage capital flows into these two cryptocurrencies.
Memecoins are currently extremely illiquid and volatile, with investor interest focused on BTC and ETH. “Aside from Memcoins, much of the cryptocurrency market is still struggling with poor liquidity.”
Finally, Lienkha added that the last bull run is structurally very different from the rally in 2021.
*This is not investment advice.