Memecoins Fly as Risk-on Sentiment Returns

On the back of a 30% correction in Bitcoin and a 10% correction in the S&P 500, risk assets are beginning to surge, led by Solana memecoins yet again.

CoinGecko’s “Pump.fun ecosystem” category is up 19% over the last 24 hours, along with the “AI meme” category, which is up 14% in the same period.

The FARTCOIN memecoin and AI agent platform ARC are among the best performers, with FARTCOIN up 100% over the last week and 25% in the last day, while ARC is up 55% over the last day. Together, the two tokens added roughly $220 million in total market capitalization in the last 24 hours.

In addition to legacy meme price action, protocol revenue confirms the risk-on environment, as PumpFun reclaims its spot as the third-highest revenue generator in DeFi, at least over the last 24 hours. PumpFun held the third spot behind Circle and Tether through most of H2 2024, but was recently flipped by Hyperliquid amidst the memecoin market’s brutal correction.

The risk-on sentiment is potentially aided by the market’s lopsided positioning. Ethena founder Guy Young shared a potential altseason metric, indicating that traders are so biased towards declining prices that they would rather bet against the market than capitalize on risk-free Treasury bill rates.

“In the last two years, we have had only two periods where funding averaged below risk-free rates for more than two consecutive weeks. Alts went vertical immediately after on both occasions. As of last Friday, we just recorded the third period,” noted Young.

Altcoins are also surging, led by Render, Sonic, and Worldcoin, which are up between 13 and 16% over the last day.