Is the Memecoin Boom Over? Tokens Are Losing Investors and Capital
Just a month after the launch of TRUMP and MELANIA tokens and the high-profile collapse of LIBRA, the memecoin market has taken a sharp downturn, becoming one of the most debated topics in recent weeks.
Memecoins, originally fueled by jokes and viral content, quickly attracted capital and investor interest, even from major players. However, a wave of fraudulent schemes and project failures, coupled with growing market fatigue from constant hype, has forced a reassessment of the sector.
A key turning point was the 94% collapse of the LIBRA memecoin within just a few hours. Initially backed by Argentine President Javier Milei, the token quickly plummeted after insiders withdrew over $107 million in liquidity.
Overall, key metrics on major memecoin launch platforms, including Pump․fun, saw a sharp decline starting in February 2025, with losses continuing throughout the month. For instance, the daily creation of new tokens dropped by 90%, while the total market capitalization of memecoins fell 32% from February’s peak, according to CoinGecko. Trading volume also plunged by 72%.
Related: Nic Carter Says Memecoins Are Dead—Is He Right?
Why Are Memecoins Falling?
Many analysts believe this rapid decline is not random but rather the result of prolonged market oversaturation with projects that lack real value. Memecoins were originally meant to be short-lived trends, so it’s no surprise that investors have shifted their focus to more stable and fundamentally strong assets like BTC, ETH, and SOL.
It’s important to note that meme coins were always “seasonal”, but that also makes those that survive and thrive across cycles, particularly rare. The likes of $DOGE, $SHIB, $BONK have weathered market cycles and offer lessons for meme coin creators looking to build a longer term asset,
CoinGecko analysts noted.
Another major factor in the memecoin downturn is regulatory uncertainty. The absence of clear legal frameworks allowed many projects to circumvent traditional regulations, leading to overinflated valuations and liquidity manipulation. Moreover, VC funds and private investors, drawn by the potential for quick profits, often launched memecoins using a pump and dump strategy—artificially driving up prices before offloading assets or draining liquidity.
The Future of Memecoins and Tokenization
Despite the current downturn, tokenization continues to gain momentum. Even traditional financial institutions, known for their conservative approach, are now exploring decentralized technologies as alternatives to conventional investment instruments. For instance, some companies have already started tokenizing U.S. Treasury bonds, making it easier for international investors to access the American market.
In this context, memecoins are just one part of the tokenization trend—though not necessarily the most practical. However, on a larger scale, data from GeckoTerminal shows that in January 2025 alone, over 600,000 new tokens were created, pushing the total number of tokens past 5.5 million. Some analysts predict that if this growth continues, the total number of tokens could exceed 1 billion within the next five years.
It’s clear that the memecoin phenomenon is here to stay. History has shown that projects with strong communities can withstand crises and even reach new heights by adapting to changing market conditions. Therefore, this downturn could serve as a foundation for future success for those who learn from past mistakes and shift their focus toward creating real value rather than chasing quick profits.
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