@maximiliona7
A persistently negative Sharpe ratio for memecoins suggests high risk and poor returns, which could drive capital back to blue-chip cryptocurrencies like BTC and ETH. Investors seek risk-adjusted returns, and if memecoins fail to offer sustainable gains, capital rotation to more stable assets is likely. However, liquidity and speculation play key roles—memecoins often attract retail traders despite poor risk-reward profiles. If overall market sentiment remains speculative, funds may stay within high-volatility assets. On the other hand, institutional investors prioritizing long-term value could reallocate capital into BTC or ETH if memecoin underperformance continues. The shift depends on broader market conditions and investor appetite for risk.
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