Memecoin Market Faces Collapse as Valuations Drop 56%

• Memecoin market capitalization has dropped by 56% since December, with trading volumes plunging 26.2% in the past month.
• Industry analysts compare the decline to the NFT market crash, warning that further losses could be expected.
• Dogecoin remains dominant, but the overall decline in investor interest suggests a potential end to the memecoin speculation wave.

The memecoin market capitalization experienced substantial depreciation to $54 billion at March 6 2025. The market capitalization of memecoins experienced a drastic drop of 56% since reaching $137 billion on December 8, 2024 resulting in its current value at $55 billion.

Memecoins reached their highest point in January after Solana launched TRUMP and MELANIA tokens during the U.S. Inauguration weekend. The market reached its highest point at $115 billion during a brief moment before falling down to $60 billion on February 8.

Various analysts connect the market decline to economic disruptions and regulatory issues alongside instances of insider trading. Investors expressed concerns about memecoin promotions due to celebrity figures including Donald Trump and Argentina’s Javier Milei becoming involved.

Comparison to NFT Bubble Collapse

Industry analysts draw parallels between the memecoin downturn and the NFT market collapse. A February analysis by Azuki researcher Wale. moca highlighted similarities, noting that both sectors followed speculative trends before experiencing sharp corrections. Another observer, beaniemaxi, believes the market decline is far from over, stating that many hyped memecoins are already down 90%, with further declines expected.

Despite the downturn, Dogecoin remains the largest memecoin, holding 53% of the total market capitalization. Shiba Inu ranks second with a $7.7 billion market cap, followed by PEPE at $2.9 billion. The Official Trump token is now the fourth-largest memecoin, with a valuation of $2.6 billion, while MELANIA sits at the eighth position with a $444.4 million market cap.

Pump.fun’s Decline Affects Market Sentiment

The collapse of Solana-based launchpad Pump.fun has further contributed to the decline in memecoin trading activity. Dune Analytics data shows that new token launches on the platform have dropped by 80% since their peak on January 20. The platform has also been criticized for facilitating rug-pull projects, leading to distrust among investors. The number of daily token launches peaked at 70,000 in January but has since fallen to 53,000 in early February.

Market sentiment has turned negative, with a 26.2% decline in trading volumes over the past month. Concerns over market manipulation have intensified, with Zeta Markets co-founder Anmol Singh warning that memecoins have been exploited by celebrities and influencers. He described the trend as a blatant manipulation strategy that has eroded investor confidence.

Google Trends data shows a drastic drop in searches for “memecoin,” falling from a peak score of 100 in January to just 8 last week. Trading volume on Pump.fun has also plummeted from $3.3 billion in January to $814 million, marking a 75% decline. Many analysts believe only memecoins with strong community backing, such as Dogecoin, will endure while others fade into obscurity.