Crypto Speculation Drops to 2024 Lows as Traditional Finance Leveraged ETFs Reach $239 Billion

In the world of finance, traditional leveraged investment products are setting records, yet interest in speculative assets in the cryptocurrency market has dwindled significantly.

Key Takeaways

The demand for speculative assets among crypto investors has decreased, with memecoin dominance reaching its lowest point since February 2024.
Traditional leveraged ETFs have surged to an all-time high of $239 billion in assets under management, signaling a shift in investor interest from cryptocurrencies to traditional financial products.
The decline in crypto investor sentiment post-October market crash reflects ongoing caution and a lack of enthusiasm for many cryptocurrencies.
"Smart money" traders are increasingly shorting memecoins while betting on a rise in Ether values.

Crypto speculation at 2024 lows as TradFi leveraged ETFs hit record $239B

Diminished Speculation in Crypto Markets

Interest in speculative investments has notably cooled among crypto investors. According to CryptoQuant, a platform that tracks market data, the dominance of memecoins, when compared to altcoins, has hit a nearly two-year low as of February 2024. Ki Young Ji, the co-founder and CEO of CryptoQuant, remarked in a recent post that “Memecoin markets are dead.”

Memecoin dominance in altcoin markets. Source: Ki Young Ju

In stark contrast, there is a rising enthusiasm among investors in traditional equities. Leveraged ETFs in traditional finance (TradFi) have reached an unprecedented $239 billion in assets during the third quarter of 2025, as reported by Bloomberg data presented by Barchart. This trend suggests a declining interest in high-risk digital assets, as investors seem to prefer the stability of regulated and familiar financial products, amidst less volatile equity markets.

Total assets in leveraged ETFs

According to Lacie Zhang, a market analyst from Bitget Wallet, this trend indicates a maturing phase in both crypto and equity markets where risk is now taken in a more regulated environment rather than in uncertain assets like memecoins, which often suffer from low liquidity and regulatory concerns.

Impact of October Market Crash on Investor Sentiment

Since the significant market crash in early October, overall crypto investor sentiment remains subdued, affecting not only memecoins but a wide array of cryptocurrencies.

Following a slight recovery from an “Extreme Fear” rating of 10 recorded on November 23, the current score is still sitting at 29, indicating a state of “Fear.” This level is significantly lower than the 62 “Greed” rating observed on October 7, prior to the $19 billion crash in the crypto market, as shown by CoinMarketCap's Fear & Greed Index.

Crypto Fear & Greed Index, one-year chart. Source: CoinMarketCap

Furthermore, traders identified as "smart money" on the Nansen blockchain intelligence platform—who are known for making profitable trades—are positioning themselves to benefit from declines in major memecoins and many cryptocurrencies.

Data from Nansen shows that this group was net short on Fartcoin (FART) by $3.5 million and on Pump.fun (PUMP) by $1.5 million. Nonetheless, they are expressing optimism about potential gains in Ether.

Smart money traders top perpetual futures positions on Hyperliquid. Source: Nansen

Conclusion

The recent dynamics in the cryptocurrency market highlight a distinctive shift: investors are increasingly gravitating toward more stable, regulated products within traditional finance, as the speculative appeal of the crypto space wanes. This trend raises crucial questions about the future of cryptocurrencies amidst evolving investor preferences and market sentiments.