The crypto market is the hub for high volatility and unpredictability, especially the meme coins. Just a few weeks ago, the market was flourishing with gains, adding significant value to digital assets. However, the recent report showcased a staggering $44 billion loss in meme-themed cryptocurrencies alone. What will come after this? Let’s discuss.
Meme Coins Market Cap Declines By $44B
Over three weeks, the meme tokens market has seen massive turbulence. Although this instability was part of the decline of global altcoins, meme-themed cryptocurrencies were hit the most significantly, facing a drop of $44 billion. The market cap clearly shows this drop, where earlier, it was around $117.60 billion on January 17, but the same is down to $69.87B at press time.
This 37% drop has significantly affected top meme coins and investors. The Dogecoin price declined 24%, the Shiba Inu price fell 20%, PEPE 29%, and many others this week. Although such drops have been standard in the market, the drastic shift of meme currencies from hype and gains to declines shocked many.
What Caused Meme Coins to Crash?
The Donald Trump tariffs and trade war brought heavy volatility to the market. However, the drop in these cryptos began even before the global crypto market crash, but the collision sparked persistent bearish sentiment among investors. Additionally, the meme coins volatility and exaggerated price moves fueled the decline.
The launch of the TRUMP and MELANIA tokens is also to blame. Their association with the current US President, Donald Trump, and first lady Melania Trump brought them tremendous attention. As a result, they sucked all the liquidity. This crashed the rest of the meme-currencies, resulting in most investors in losses while only a few profited.
Regardless, investors’ sentiments played the most prominent role. Amid such high volatility, traders often move towards utility-based tokens, which could survive market corrections. However, sentiment recovery may boost meme-themed cryptos, but the outlook may differ with the altcoin season.
Pump.Fun Destroyed Altcoin Season Claims Analyst
Pump.fun was launched in 2024, making it simple to launch a crypto token. Since its introduction, the influx of newly launched tokens has increased multiplefold, which soon became concerning due to diverted capital in the market. However, crypto analysts like Cas Abbe claim Pump.Fun has destroyed the altseason cycle.
In an X post, Abbe mentioned that the launch of this meme coin launcher has brought a dramatic shift in the market’s cycle. Although the regulatory clarity was low, altcoins experienced a consistent uptrend for 6-8 weeks in 2024. However, Abbe claims that Pump. Fun disrupted that by flooding the market with millions of tokens.
This resulted in the divergence between the Bitcoin price trajectory and the top altcoins market capitalization. The analysts believed this flooded launch derailed the altcoin season dynamic, leaving the altcoin performance stranded. This stands true for the meme coins performance, which has been struggling for weeks.
For now, this is a matter of discussion, but this Solana meme coin launcher is currently being criticized for many reasons, including the rising number of pump-and-dump scams.
What’s Next?
After an impressive performance through 2024, meme coins are facing high volatility, wiping off $44B in just three weeks. This began as the investors moved to high utility tokens, but the recent crypto market crash worsened it. However, some analysts see it as part of the decline of altcoins, where the pump.Fun and millions of launched tokens diverted the altcoin from Bitcoin’s price trajectory.
Now, the eyes are on the altcoin season, which is the most awaited part for investors in 2025, but meme-themed cryptos may never recover to their peaks. This is because these would not be able to attract all the liquidity back, especially if the altseason begins. With this experience and the market’s bearish sentiments, investors must be cautious of meme-themed cryptocurrencies.
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