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While narrative and sentiment certainly play a huge role in short-term price action for tokens, this cycle’s tides seem to be shifting back to fundamentals.
Consensus has formed around the fact that the upside for many of the most hyped token drops was already captured long ago when VCs signed their token warrant deals. This building disillusionment, with multiple tokens launching with fully-diluted values (FDVs) above $10B, has been a driving force in the rise of memecoins this cycle. While memecoins may only have value as long as they capture attention, at least they don’t have swaths of tokens squirreled away to be dumped on the market at later dates.
In the past month, older, revenue-generating protocols with most of their tokens already in circulation have also caught a bid. While this may be partially due to the inflow of institutional interest this cycle, there's value in keeping a close eye on tokens with solid fundamentals, whether they be revenue-generating, have most of their tokens unlocked, or, ideally, have both of those properties.
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