How memecoins impacted crypto last quarter: Grayscale

This is a segment from the Empire newsletter. To read full editions, subscribe.

So no one’s surprised that the first quarter of the year wasn’t exactly a stellar one, right?

(If it makes you feel better, tech stocks also sank, according to Grayscale’s Research Insights.)

Overall, the crypto sector’s price index fell 18% during the quarter, which ended on March 21.

If you break it up by segments, “Consumer & Culture” had it bad. Some memecoins — like DOGE — were included in this segment, which helps explain the dramatic decline.

That’s also the case for smart contract platforms, because Solana’s pretty popular with the memes. But despite the slowdown, Solana still managed to generate roughly half of the estimated total fees for the segment ($390 million) last quarter.

If folks continue to lose interest in memecoins throughout this quarter, then — as Lightspeed’s Jack Kubinec noted earlier this week — “Solana’s validators, stakers and probably even token holders are in for some harder days ahead.”

The flipside is that it perhaps allows for some expectation resets and, if we’re going to stay narrative-driven, then maybe a new interest can take the place of memecoins. Or perhaps it has already, given the fresh conversations around stablecoins and RWAs.

Grayscale’s Research team even noted that, for the current quarter, they’re focused on tokens tied to RWAs and DePIN. Funny that.

Specifically, they’re looking at Maple and Geodnet. Both should be familiar to our readers, given that Geodnet is one that Ryan Connor of Blockworks Research previously told Empire readers to watch, and we talked about bitcoin margin loans with Maple CEO Sid Powell a few months back.

On the other hand, despite the negativity last quarter, bitcoin network activity measures were “generally healthy,” analysts noted.

*Always look on the bright side, right?*

“In contrast, monthly active onchain users were about unchanged from the prior quarter, at 11 million. The growing difference between these two indicators suggests that recent demand for bitcoin has likely come from users interested in its function as a ‘store of value’ rather than a ‘medium of exchange,’” they wrote.

Outside of bitcoin, RWAs and DePINs, the analysts continue to keep an eye on DeFi and staking solutions, Ethereum scaling solutions, and the intersection of crypto and AI.

Now I’m curious: What are you interested in?

Get the news in your inbox. Explore Blockworks newsletters:

Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
Empire: Start your morning with the top news and analysis to inform your day in crypto.
Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.