Coingecko: Which track's crypto narrative will dominate in Q1 2024?

Author: Lim Yu Qian, Coingecko; Compiler: Deng Tong, Golden Finance

Which cryptocurrency narratives have the highest returns?

Memecoin is the most profitable cryptocurrency so far in the first quarter of 2024, with the highest average return of its top tokens at 1312.6%. Of the 10 largest memecoins by market capitalization at the end of the quarter, three are new tokens that were only launched around March: Brett (BRETT), BOOK OF MEME (BOME), and cat in a dogs world (MEW). BRETT had the highest return of 7727.6% by the end of Q1 compared to its offering price, followed by Dogwifhat (WIF), which returned 2721.2% quarter to date (QTD) after going viral and sparking the current memecoin craze.

Notably, the memecoin narrative was 4.6 times more profitable than the second best performing crypto narrative by RWA and 33.3 times more profitable than the lowest returning Layer 2 narrative in Q1 this year.

Source: coingecko.com/research

The second most profitable crypto narrative, RWA, had a return of 285.6% in the first quarter of 2024. RWA was once the most profitable narrative in early February, but was surpassed by memecoins and artificial intelligence narratives until it surpassed the artificial intelligence narrative again at the end of March. Among the largest RWA tokens, MANTRA (OM) and TokenFi (TOKEN) saw the biggest gains, up 1074.4% and 419.7% quarter-to-date respectively, while XDC Network (XDC) was the only token to fall 15.6%.

Artificial Intelligence followed closely behind as the only other narrative to post 3-digit returns (222.0%) in Q1. All large-cap AI tokens saw gains, with AIOZ Network (AIOZ) up 480.2% and Fetch.ai (FET) up 378.3%. Notably, even the lowest gainer, OriginTrail (TRAC), saw a 74.9% return in Q1, suggesting that large-cap AI tokens benefited from interest in the overall narrative.

DeFi and DePIN see modest gains in 2024

The DeFi narrative saw a modest return of 98.9% in Q1 after regaining the lead over DePIN in the final days of the quarter.In particular, DeFi narrative returns saw a boost in late February on the back of the Uniswap (UNI) fee conversion proposal. The most profitable large-cap DeFi token in Q1 so far is Ribbon Finance (RBN), which is up 430.8% quarter-to-date following the project’s pivot to Aevo and successful token launch. Other large DeFi tokens with strong returns include Jupiter (JUP) at 125.7%, Maker (MKR) at 121.2%, and The Graph (GRT) at 111.0% QTD.

DePIN initially recorded losses in the first half of Q1 but ended the quarter with an 81.0% return. The best performers among the large DePIN tokens were Arweave (AR) with a gain of 292.5%, Livepeer (LPT) with a gain of 133.7%, and Theta Network (THETA) with a gain of 124.5%. Meanwhile, Helium (HNT) underperformed and was the only large DePIN token to fall 10.5% in Q1.

Layer 1, Gaming, and Layer 2 Lag

Layer 1 (L1) was relatively unprofitable in Q1 2024, returning just 70.0%. While Solana (SOL) has been in the spotlight as a popular memecoin chain and is up 91.9% QTD, returning to 2021 price levels, the best performing large-cap L1 cryptocurrencies are actually Toncoin (TON) and Bitcoin Cash (BCH), at 131.2% and 130.5% respectively. In comparison, Bitcoin (BTC) is up 65.1% after hitting a new all-time high, while Ethereum (ETH) has a lower quarter-to-date gain of 53.9% despite a US spot Ethereum ETF application.

The GameFi narrative had its first quarter performance on par with the L1 narrative, with a return of 64.4%. Among the large-cap GameFi stocks, the biggest gainers were Echelon Prime (PRIME) at 124.0%, Gala (GALA) at 123.0%, and Ronin (RON) at 112.3%.

Layer 2 (L2) was the least profitable cryptocurrency at the start of the year, with a significantly lower gain of 39.5%. Among the large-cap L2 tokens, the established Ethereum L2 performed the worst: Arbitrum (ARB) returned 5.6%, Polygon (MATIC) returned 1.2%, and Optimism (OP) was slightly down 1.2% this quarter. On the other hand, Stacks (STX) and Mantle (MNT) have relatively strong quarter-to-date returns of 142.5% and 95.8%, respectively.

Most Profitable Crypto Narratives

Crypto narratives’ performance in Q1 2024, ranked by average quarter-to-date price returns of the top 10 tokens: