Memecoin market crashes 56% since December peak amid fading hype

The memecoin market has erased all of the gains that followed Donald Trump’s presidential victory in November 2024, having lost more than half of its value since December.

According to CoinMarketCap data, the total market capitalization of memecoins stood at $54 billion on March 5, down 56% from $124 billion on Dec. 5, 2024.

The memecoin market has gradually declined after peaking at a record-breaking market cap of $137 billion on Dec. 8, briefly rising and dropping amid memecoin launches by Trump and First Lady Melania Trump in January.

*Total memecoin market capitalization in the past year. Source: CoinMarketCap*

Some industry observers have attributed the massive memecoin slump to volatile global economic conditions, as well as lack of memecoin regulation, insider trading scandals and endorsements by public figures.

Major memecoins are set for consolidation

The “memecoin bubble has burst” due to a few critical factors, such as economic uncertainty over the Trump administration and the mix of economic and foreign policies in the US, Zeta Markets co-founder Anmol Singh told Cointelegraph.

Singh also pointed to increased involvement from celebrities and social media influencers, who have been accused of using their influence to pump tokens before selling for profit:

“Blatant exploitation as celebrities, key opinion leaders, cabals and insiders seek to run up tokens by leveraging their influence and then take profit on the retail traders they bring in — fundamentally shaking confidence and trust among retail participants.”

Following a significant sell-off, the memecoin market will likely see consolidation into the major memecoins while “others slowly fade out of relevance,” Singh predicted.

Dogecoin leads memecoin market at 53% dominance

Among “major memecoins,” Singh cited established memecoins such as Dogecoin (DOGE), Pepe (PEPE), Bonk (BONK) and Dogwifhat (WIF), as well as the Official Trump (TRUMP) memecoin.

“Most other memecoins won’t be interesting for traders, and that liquidity will go elsewhere,” Singh said, suggesting that the rest of memecoin capital will likely be distributed to perpetual futures, spot crypto investments and fiat.

*The top seven memecoins by market capitalization as of March 5. Source: CoinMarketCap*

The Zeta Markets co-founder also predicted that investors would likely approach new memecoin launches with more caution going forward.

At the time of writing, Dogecoin — a favorite memecoin of Trump’s senior adviser Elon Musk — is the largest memecoin on the market, accounting for 53% of the entire memecoin market cap, according to CoinMarketCap data.

SHIB and PEPE rank the second and the third-largest memecoins, with the market caps amounting to $7.7 billion and $2.9 billion, respectively.

The Official Trump memecoin is currently the fourth-largest memecoin with a market cap of $2.6 billion.

Some prominent crypto community figures like Tron founder Justin Sun have claimed that memecoins are the future of crypto, but called for investors to focus on well-established memecoins like DOGE.

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