Investment products in traditional finance are hitting unprecedented levels, yet interest in speculative assets in the cryptocurrency sector remains low.
Crypto investors are showing diminished speculative interest, with memecoin dominance compared to altcoins reaching a near two-year low last observed in February 2024, according to the data platform CryptoQuant.
“The memecoin market is dead,” stated Ki Young Ji, co-founder and CEO of CryptoQuant, in a post on X this Thursday.
In contrast, equities investors are experiencing a surge in speculative interest, as traditional leveraged exchange-traded funds (ETFs) reached a record high of $239 billion in assets under management during the third quarter of 2025, according to Bloomberg data shared by Barchart.
This dynamic indicates a decline in enthusiasm for high-risk digital assets, as speculative interest shifts toward regulated, traditional finance leveraged products within less volatile equity markets.
These market conditions suggest a maturation of both crypto and equities markets, where risk-taking is now being expressed through regulated, familiar products that come with clearly defined safeguards, rather than through memecoins, which suffer from issues like “thin” liquidity and regulatory uncertainty, according to Lacie Zhang, a market analyst at Bitget Wallet, who spoke to Cointelegraph.
”A revival would likely require a strong catalyst — such as a new viral narrative, major exchange listings, or decisive price action — to reignite retail interest.”
Related: Bitcoin treasuries stall in Q4, but largest holders keep stacking sats
Crypto investor sentiment yet to recover from October market crash
The interest among crypto investors continues to be subdued across most cryptocurrencies since the significant market crash at the beginning of October, extending beyond just memecoins.
A slight recovery in crypto investor sentiment was noted, improving from an “Extreme Fear” level of 10 recorded on November 23, but the current reading of 29 still indicates “Fear,” remaining far below the 62 “Greed” level recorded on October 7, prior to the $19 billion crypto market crash, according to CoinMarketCap’s Fear & Greed Index.
Meanwhile, the traders in the crypto industry achieving the best returns, referred to as “smart money” traders on Nansen’s blockchain intelligence platform, are betting against the leading memecoins and many cryptocurrencies.
Smart money was net short on Fartcoin (FART) for $3.5 million and net short on the Pump.fun (PUMP) token for $1.5 million, Nansen data indicates.
However, this group is optimistic about Ether (ETH) and the decentralized exchange Hyperliquid’s (HYPE) token, suggesting a preference for tokens tied to revenue-generating blockchain protocols.
Related: Crypto nears its ‘Netscape moment’ as industry approaches inflection point
The positioning of this group might also indicate investor fatigue regarding the memecoin launches from the previous market cycle, given troubling data surfacing about some of these coins.
Recent blockchain data from Bubblemaps has revealed that approximately 30% of the Pepe (PEPE) token’s initial supply was consolidated under an entity that sold $2 million worth just one day after the coin’s launch, raising questions about the fairness of the memecoin’s launch.
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