The market of memecoins has undergone a drastic reduction of 56% from the highs of December. In fact, all the gains following the presidential victory of Donald Trump in November 2024 have been erased.
According to CoinMarketCap data, the total market value of memecoins is 54 billion dollars, compared to 124 billion dollars on December 5, 2024. This decline represents a significant contraction of the sector, which had reached a peak of 137 billion dollars on December 8, 2024.
Summary
Factors behind the crash of Memecoin
Several industry analysts attribute the collapse of memecoin to unstable global economic conditions and a lack of regulation. Additionally, insider trading scandals and the support of public figures have contributed to undermining investor confidence. Anmol Singh, co-founder of Zeta Markets, criticizes the “blatant exploitation” by celebrities and influencers who promote memecoin to profit from them, damaging retail investor confidence.
Consolidation Prospects for Major Memecoins
With the market in decline, a consolidation of the main memecoins, such as Dogecoin, Shiba Inu, and the official Trump memecoin, is expected, while others may gradually lose relevance. This consolidation process could lead to greater stability in the sector, with the capital from less popular memecoins shifting towards investments in more traditional cryptocurrencies or returning to fiat currency.
Dominance of Dogecoin and other main Memecoins
Dogecoin confirms itself as the largest memecoin in the market, representing 53% of the total memecoin market. It is followed by Shiba Inu and Pepe with market capitalizations of 7.7 billion dollars and 2.9 billion dollars respectively. The official memecoin of Donald Trump ($TRUMP) ranks fourth with a capitalization of 2.6 billion dollars.
Despite the challenges, prominent figures in the crypto community like Justin Sun, founder of Tron, continue to assert that memecoins represent the future of the crypto sector, but emphasize the importance of focusing on well-established memecoins like DOGE.
Forecasts and caution for the future of Memecoin
Considering the recent crash and the uncertainties of the market, investors will likely approach new memecoin launches with more caution. Prudence could become a key component in investment strategies in this market segment, especially in a context of increasing regulatory scrutiny and market volatility.
The decline of the market for memecoin raises critical questions about the long-term sustainability of assets based predominantly on hype and external influences. The future evolution of this sector will be crucial to better understand the role of memecoin within the broader cryptocurrency ecosystem.
