The Fall of Internet Capital Markets: What’s Behind the Drop?

The Internet Capital Markets (ICM) sector is experiencing a steep decline in activity, raising questions about its long-term viability. Trading volume on the Believe App has plummeted by 80% from the highs seen just last week.

In parallel, the creation of new tokens has also dropped by 77%, signaling a slowdown in market interest.

Is the End Near for Internet Capital Markets?

Data from Dune Analytics revealed that ICM tokens’ daily trading volume has continuously declined since peaking at $729.3 million on May 14. On May 20, the trading volume was recorded at just $143.6 million.

Similarly, the number of newly created tokens per day has fallen from 4,977 on March 13 to 1,134 by May 20.

Moreover, Believe App has facilitated the creation of over 23,000 tokens to date. However, only 5.3% of these tokens have been activated. 

This low activation rate suggests that many tokens may not be gaining traction or interest from users. This signals an oversupply or a lack of utility in the launched tokens.

This trend has also drawn sharp criticism from industry observers. Analyst Mars DeFi recently pointed out the erosion of user trust in ICMs in a statement on X (formerly Twitter). He attributed the decline to an influx of “empty tokens” driven by the meme coin craze. 

“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,” the post read.

The analyst argued that ICMs’ original vision of fostering valuable, product-driven projects has been undermined by low-effort launches with little substance. He also pointed out that the era of the meme-driven market is fading. 

According to him, the problem isn’t the memes themselves, but rather that they no longer offer the substance or credibility needed to sustain long-term interest.

“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 wrote.

DYOR co-founder, Hitesh Malviya, had previously cautioned that the ICM narrative might only sustain momentum for four to six weeks. With the sector showing signs of exhaustion just one week after its peak, Malviya’s prediction may be materializing.

Nevertheless, not all developments point to a permanent downturn. Ben Pasternak, founder of Believe, recently announced the upcoming launch of the Believe API.

“The goal of the Believe API is to make it easy for builders to create harmony between their product and coin, no matter what their product does,” Pasternak stated.

This development can likely attract more builders to the platform. Moreover, it could also spur a revival in token creation and trading volume by enabling developers to integrate better functionalities into their projects. 

In addition, Base Network is also keeping a close eye on the Internet Capital Markets trend. Jesse Pollak, Head of Base and Coinbase Wallet, told BeInCrypto that he views the increasing token creation and the growth of decentralized applications as part of this emerging ICM trend.

“We’re pleased to see a steady increase in TGEs and new apps on Base. We see all this as internet capital markets, and we see the $14 billion+ assets on Base as the center of that emerging global economy,” Pollak said.

He also emphasized Base’s role in supporting the crypto economy by providing infrastructure and tools for users and developers.

“If we want to bring a billion people onchain, then one day soon, many more things will be tokenized, and Base provides both the infrastructure and tools to help make that easier for both consumers and builders to deploy tokens,” he added.

Still, challenges remain. If the ICM sector hopes to regain user confidence and sustain growth, it must shift its focus from speculative, meme-driven launches to projects with tangible utility.