Key Takeaways:
More than $47 billion in value has been erased from the meme coin market in the last few weeks. Most meme tokens have declined by between 10% to 70% year-to-date. Despite the downturn, analysts believe the meme tokens hype is far from over.Meme coins have seen a major pullback in recent weeks due, in part, to various economic factors, including Trump’s infamous tariffs. Still, the market is far from dead, according to industry experts who spoke to Cryptonews.
A new report from Kaiko Research shows that most meme tokens have underperformed the broader cryptocurrency market this year, with declines of between 10% and 70% since the beginning of January.
According to Coinmarketcap data, more than $47 billion of value has been erased from the subsector in the three weeks since Jan. 18. During the same period, total daily trading volume slumped over 35% to $9.5 billion.
That’s a far cry from the massive growth reported in the meme coin market in 2024, with tokens such as Daddy, Mother, PNUT, and others posting increases of as much as 10,000% days following their launch.
But as markets matured and wider economic issues—such as President Donald Trump’s recent tariff increases against Canada, China, and Mexico—came into play, meme coins have suffered.
‘The frenzy has subsided, as has the entire altcoin market,” said the Neiro meme token community lead known pseudonymously as ‘S’ in a conversation with Cryptonews. “With meme coins, the effect is exacerbated for the same reason why there was a frenzy to begin with: volatility.”
Illia Otychenko, lead analyst at crypto exchange CEX.io, said the meme coin mania has largely cooled off, telling Cryptonews:
“Meme coins now account for less than 3% of the total crypto market cap – below post-election levels. Meanwhile, meme coin trading volume has plunged over 80% since Trump’s inauguration, with Solana DEX activity returning to pre-TRUMP [token] launch levels.”
Temporary Lull
Despite the downturn, analysts believe the frenzy around meme tokens is far from over. As the Kaiko Research report points out, meme coins typically thrive on hype, celebrity endorsements, and the promise of quick gains.
All these fundamentals are still in play, it says, mirroring a broader post-Covid shift toward digital entertainment and gamified investing – basically the NFT mania of 2021. As the Neiro community lead ‘S’ puts it:
“The mindshare meme coins have is still enormous. They make up a vast majority of the total traded volume, even in the current market conditions.”
For Otychenko, the CEX.io exchange lead analyst, the non-stop launch of new meme tokens shows the trend is not slowing down.
Around 50,000 meme coins are created daily on the Solana-based launchpad Pump.fun, “a pace that has remained strong over the past month,” he said.
His comments were echoed by Blockworks data analytics manager Daniel Smith, who told Cryptonews that meme coin activity is at an all-time high.
He said 1.7 million new meme coins have been created on the Solana blockchain alone in the last few months, with $225 million in revenue.
Phantom, a user-facing wallet built for the Solana ecosystem, processed over 10 million transactions during the launch of the TRUMP meme coin on Jan. 19, Smith said. The token hit a $76 billion market cap in 24 hours.
For context, the data analyst said a single Solana (SOL) wallet processed the same amount of transactions that “Base sees in an average day, all other L2s combined see in a day, and Ethereum mainnet sees in a week.”
Exchanges Profit Off Meme Coin Frenzy
In any event, crypto exchanges are incentivized to keep the meme token mania alive. Per Kaiko, meme coin trading is a “highly profitable” venture for exchanges and market makers – the people or entities that provide liquidity to facilitate buying and selling of the assets.
For example, the average bid-ask spread for meme tokens—representing the amount earned by market makers for providing liquidity—”far exceeds those of large-cap altcoins like SOL and XRP,” the report noted.
The report said exchanges are generating millions of dollars in fees from meme coin trading, with listings on centralized exchanges rising sharply since 2020, including from U.S.-regulated platforms that have been reluctant to do so previously.
According to Kaiko, the gap between offshore meme coin launches and U.S. exchange listings “has narrowed from years to months.”
Tokens like TRUMP and MELANIA got listed on Binance and Coinbase within days of their launch, boosted by their ties to Trump and the hype they created.
But the frenzy also means that major U.S. exchanges such as Coinbase have now been forced to start looking at moving from a so-called “allowlist” to a “blocklist” strategy to manage the influx of tokens more efficiently, said the report.
Kaiko warned that quickfire meme coin listings could be a trap.
“If listings happen too quickly, liquidity may fail to keep up with the rising volumes, intensifying volatility,” the report noted, adding:
“This mismatch will force market makers to widen bid-ask spreads to compensate for the increased risk, ultimately driving up costs for traders.”
The Rise of Political Meme Tokens
According to Otychenko, the latest meme coin hype has been largely driven by political tokens such as TRUMP and MELANIA.
The tokens saw an initial boost, he says, but PolitiFi tokens as a category have lost about 80% of their market value and volume since Trump’s election victory.
The next major event for related tokens will be the upcoming unlock of MELANIA in a month and TRUMP in three months. Otychenko says token unlocks exceeding 1% of supply typically put “downward price pressure.”
Since both these meme coins “far exceed that threshold,” he expects the assets to decline even further. Unless the Trump administration whips up some crypto-friendly policies that “could uplift the broader market” fast.
‘S,’ the pseudonymous Neiro community lead, thinks the future of meme coins in 2025 will depend on their ability to evolve and adapt to changing market conditions. He said investors will be drawn to tokens that deliver more tangible value and real-world utility.
“At the bottom end of the current mini cycle, it’s interesting to see how the market participants sit back and re-evaluate what they want to see from meme coins,” ‘S’ told Cryptonews, adding:
“They did the same, back in 2023-2024, as rejecting VC-backed crypto assets with predatory tokenomics and vesting schedules, in favor of meme coins. The same pattern will repeat…investors will want to see an evolution, which brings a little more tangible value and perhaps even real-world value into the asset class.”
The analyst suggested that one way of doing this is via “IP coins,” which are tokens that hold licenses to Intellectual Property (IP) rights for the art or meme they are tokenizing. Examples include DOG, CAT, and MIGGLES.
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