Meme is weak, AI takes over

By Joshua Deuk

Compiled by: Vernacular Blockchain

Editor’s Note:

As Bitcoin once again broke through $110,000, the market greed index continued to rise, especially the enthusiasm of the alt season was ignited again. However, the subsequent market shocks once again shattered the fantasy.

Unlike the panic in the altcoin market, Bitcoin is fluctuating and approaching $110,000 again, and Ethereum is also beginning to break through. So, what super Alpha opportunities will there be next? Is MeMe still a super crypto track?

Joshua Deuk, head of trading at Mozaik Capital, commented on the current market:

This weekend, with more time to reflect, I wanted to share some thoughts on the markets.

I don’t think the overall directional movement of the crypto market will be apparent until after September. Given macroeconomic headwinds, summer liquidity constraints, and quarter-end positioning, the real market dynamics won’t start until market participants return after the August holidays. Judging from recent market activity, most altcoin rallies have been driven by short squeezes. Traders are reflexively chasing momentum after the previous rally — but there are no real long-term holders this time. Most have already been beaten down by the market before. As expected, the vast majority of coins that have risen sharply have experienced equally sharp declines afterwards.

Ethereum unexpectedly rebounded, and the hardest-hit sectors, such as AI and MeMe coins, led the rebound. On the other hand, tokens with real-world uses, strong fundamentals, or buyback mechanisms have shown resilience—not only performing more robustly during declines, but also recovering faster. Syrup, Hype, and AAVE are good examples. SPX, although a MeMe coin, has a completely different structure. We can extract the following insights:

01 Bitcoin demand is real and lasting

Traditional capital is gradually entering through ETFs and other regulated channels.

The nature of the capital backing BTC now is completely different from previous cycles. This is why large-scale BTC liquidations are unlikely to occur unless triggered by macro events.

02 Differentiation within altcoins will intensify

Eventually, capital will flow back into altcoins — but not across the board. Only tokens with clear purpose and real use cases are likely to attract these inflows. This is why I think Ethereum will outperform Solana. Regulatory clarity, growing decentralized finance usage, deflationary structure, and staking demand combine to create a powerful flywheel effect. And, because ETH has long failed to live up to expectations, it still has fringe buyers waiting on the sidelines.

03 Venture capital-backed tokens have structural risks

Token unlocking will continue to weigh on price action. Continued selling pressure from validators and early investors amidst lack of liquidity limits upside. This is why I believe that overvalued tokens listed on centralized exchanges are not a good option going forward. Cosmos tokens in particular face continued selling pressure due to their validator reward structure.

04MeMe has structural advantages

MeMe has structural advantages in this case, no VC unlocking, fair launch, 100% attention based. It’s pure hype mechanism — just like in the first cycle, it works.

But I think that phase is coming to an end.

Pump.fun’s token generation event and the launch of Trump Coin marked the peak of MeMe Coin’s attention. After that, interest in MeMe Coin began to wane. Even in the April rally, SOL underperformed ETH — if everyone already holds SOL, who will be the marginal buyers when the MeMe Coin momentum fades?

Some MeMe coins may still do well, especially those that have become popular outside of crypto Twitter, such as on TikTok or Instagram, through charismatic figures like MURAD. These may still bring asymmetric wealth effects. But the era of "cute dog cat coins" as alpha is over. Only those MeMe coins with strong stories and strong market perceptions - things that people can collectively believe in - have real speculative value.

Ironically, exhaustion and skepticism of VC-backed tokens opens the door for fair launch Web2/3 projects to become the next wave of wealth generation opportunities.

Keeta is a great example. But to seize these opportunities, you need to be active on-chain. Big opportunities always emerge when there is information asymmetry. Once everyone knows something, it no longer pays off.

This is why I spend more time paying close attention to the on-chain market. Keeta’s success ignited the desire to find the “next Keeta”, and capital began to chase similar fair launch altcoin narratives. Just like Bonk, the guy who made a fortune of more than 10 figures by trading MeMe coins - attention leads capital.

05Next Market Trend

So, if meme coins are no longer where the opportunity lies… what’s next?

My take: AI meets cryptocurrency.

If you’ve been following my timeline, you’ll know that most of my moves during this cycle — after the early days of SOL and venture-backed tokens — have been focused on MeMe Coin and AI.

Just like the DeFi summer, most early AI projects failed after the hype. But real utility-based projects are quietly being built in this bear market.

We’re already seeing some of these projects emerge on-chain.

As profits from MeMe Coin dry up, attention will naturally turn to new narratives.

AI, with its clear usefulness, is well-suited to be the next destination.

Many AI x Crypto projects were launched fairly, echoing Keeta’s narrative.

That's why I've spent time in the quiet weeks researching and positioning myself in this area. There's no need to rush into a full position now - but I believe this area holds the biggest asymmetric opportunities if the market sees another strong rally.