Decline in ICM Activity Sparks Concerns Over Future as Believe App Trading Volume Drops 80%

• Trading volume on the Believe platform has dropped 80%, signaling a significant slowdown in Internet Capital Markets (ICM) activity.

• The daily creation of new ICM tokens has declined by 77%, raising concerns over overall market interest.

• An analyst warns that meme-driven tokens and quickly assembled projects have eroded user trust in ICMs.

The Internet Capital Markets (ICM) sector faces a critical downturn as trading volumes and token creation plummet, indicating a fading market interest.

Is the End Near for Internet Capital Markets?

Data from Dune Analytics reveals that ICM tokens’ daily trading volume has consistently declined since hitting a peak of $729.3 million on May 14, plummeting to $143.6 million by May 20.

In a similar vein, the daily creation of new tokens has dropped drastically from 4,977 on March 13 to merely 1,134 by May 20.

Internet Capital Markets Trading Volume and Token Creation on Believe. Source: Dune

Despite the Believe App facilitating the launch of over 23,000 tokens, a mere 5.3% of these have seen active use, suggesting a troubling oversupply or lack of user engagement with newly created tokens.

This trend has garnered criticism from notable industry analysts. Mars DeFi emphasized the diminishing trust in ICMs, attributing this decline to an influx of “empty tokens” stemming from the meme coin hype.

“Users were meant to believe in new capital formation. Instead, they got noise. And now, we’ve undoubtedly hit a fatigue point. Not with tokens, but with empty tokens. This is the tipping point — and also a wake-up call,” he stated.

DeFi highlighted that the original intention of ICMs — to promote valuable, product-driven initiatives — has been compromised by low-quality launches lacking real substance. He further explained that the meme-fueled market is losing traction.

“The endgame isn’t launchpads. It’s liquid, decentralized capital markets. Not ‘launch a coin and disappear,’ but ‘launch a product and build it in public.’ That’s the power of ICMs. And that’s where this is heading if we continue to support actual products and not senseless memes,” he noted.

Hitesh Malviya, co-founder of DYOR, warned earlier that the ICM trend might sustain its momentum for only four to six weeks. With the current signs of exhaustion just a week past its peak, Malviya’s caution seems to be materializing.

However, not all developments indicate a sustained downturn. Ben Pasternak, founder of Believe, has announced the imminent launch of the Believe API.

“The goal of the Believe API is to create harmony between user products and tokens, irrespective of their application,” stated Pasternak.

This advancement could attract more developers to the platform and potentially revive both token creation and trading volume by enhancing the functionalities available to projects.

Furthermore, leaders from the Base Network are closely monitoring the trends within Internet Capital Markets. Jesse Pollak, Head of Base and Coinbase Wallet, remarked that increasing token creation and decentralized applications are pivotal in the emerging ICM ecosystem.

“We’re pleased to see a steady increase in TGEs and new apps on Base. We regard this as integral to internet capital markets, with $14 billion+ in assets on Base positioning us at the center of this evolving global economy,” Pollak mentioned.

He stressed Base’s commitment to bolstering the crypto ecosystem by offering necessary infrastructure and tools for both users and developers.

“To onboard a billion users onto chain, many more assets will need tokenization, and Base is equipped with the infrastructure and tools to facilitate that for consumers and builders alike,” he added.

Despite positive signs, challenges persist. For the ICM sector to recover user confidence and foster sustainable growth, the focus must shift from speculative, meme-based launches to projects that exhibit tangible utility.

Conclusion

As Internet Capital Markets navigate through this challenging landscape, the key takeaway is clear: a pivot towards substantial projects is essential. This focus will determine the future of ICMs, distinguishing them from fleeting trends and ensuring a more resilient ecosystem. Only time will tell if this shift can restore trust and user engagement within the market.