Which track's crypto narrative will dominate in the first quarter of 2024?

Which crypto narratives have the highest returns?

Memecoin was the most profitable cryptocurrency so far in Q1 2024, with the top coins having the highest average return of 1,312.6%. Of the 10 largest memecoins by market cap at the end of the quarter, three were 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 7,727.6% by the end of Q1 compared to its offering price, followed by Dogwifhat (WIF), which had a quarter-to-date (QTD) return of 2,721.2% after going viral and sparking the current memecoin craze.

Notably, the memecoin narrative was 4.6 times more profitable than the second best performing cryptocurrency narrative in RWA and 33.3 times more profitable than the Layer 2 narrative with the lowest returns in the first quarter of this year.

Source: coingecko.com/research

The second most profitable crypto narrative, RWA, has returned 285.6% in Q1 2024. RWA was briefly the most profitable narrative in early February, but was surpassed by the Memecoin and AI narratives until it surpassed the AI ​​narrative again in late March. Among the largest RWA tokens, MANTRA (OM) and TokenFi (TOKEN) have seen the biggest gains, up 1074.4% and 419.7% quarter-to-date respectively, while XDC Network (XDC) is the only token to fall 15.6%.

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

DeFi and DePIN will have moderate returns in 2024

The DeFi narrative delivered 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% QTD following the project’s pivot to Aevo and successful token launch. Other large-cap 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 a return of 81.0%. The best performers among the large DePIN tokens were Arweave (AR), up 292.5%, Livepeer (LPT), up 133.7%, and Theta Network (THETA), up 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 Lagging Behind

Layer 1 (L1) has been relatively unprofitable in Q1 2024, with returns of just 70.0%. While Solana (SOL) has gained attention 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 a first quarter performance that matched the L1 narrative, returning 64.4%. Among the GameFi large-cap stocks, the biggest gainers were Echelon Prime (PRIME), up 124.0%, Gala (GALA), up 123.0%, and Ronin (RON), up 112.3%.

Layer 2 (L2) has been the least profitable cryptocurrency at the start of the year, with a notable 39.5% gain. Among the large-cap L2 tokens, the established Ethereum L2s 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.

The most profitable cryptocurrency narrative

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