The Memecoin Market Drops Over 50% Since Trump's Historic Price Increase

The meme coin market, once driven by the 'Trump campaign' after Donald Trump's victory in the 2024 US presidential election, is now witnessing a horrifying decline after the peak is just a thing of the past. From a market capitalization peak of over 137 billion USD in early December, in just a few short weeks, the entire market has dropped by more than 56% to only 55 billion USD, reflecting a trend of 'bloodshed' not only in meme coins but also spreading throughout the cryptocurrency market. The Boom and Temporary Peak In the last months of 2024, meme coins have become a hot phenomenon in the cryptocurrency market. In particular, the explosion was recorded during Trump's presidency, with coins like TRUMP and MELANIA, issued on the Solana platform during the inauguration, creating a strong investment wave. In fact, in just the early days of the year, the market reached nearly $115 billion before quickly dropping to $60 billion in early February. Causes of the Crisis Many factors are believed to have led to the collapse of the meme coins market, including: Economic instability and regulatory uncertainty: Macroeconomic fluctuations along with unclear regulatory policies have diminished the confidence of investors. Insider trading scandals: Scandals related to insider trading have further escalated the tension. Involvement of famous figures: Utilizing the names of figures like President Donald Trump and Javier Milei of Argentina for promotion has contributed to driving an investment wave, but also carries risks to reputation. Compare with NFT Bubble Industry experts have not hesitated to compare the phenomenon of meme coins decline to the boom and bust of the NFT bubble. Some researchers, such as wale.moca, believe that "whenever there is a boom, these areas always follow the same pattern: initial investment enthusiasm, followed by gradual price decline over time." Similarly, some social media investors warn that although some large coins have dropped by up to 90%, the remaining value still reaches hundreds of millions of USD – and they predict that the next drop could be even more profound. The Current Art Market In the midst of chaos, Dogecoin still maintains its leading position, accounting for up to 53% of the total market capitalization of meme coins. Other coins like Shiba Inu (SHIB) and PEPE are also not far behind, ranking second and third with market capitalizations of 7.7 billion USD and 2.9 billion USD, respectively. It's worth noting that tokens associated with the Trump family such as The Official Trump and MELANIA still exist, although their values have been heavily impacted. The Collapse of Pump.fun – Icon of the "Entertainment Investment" Era One of the key factors driving the explosive growth of meme coins at the end of the year is the Pump.fun launchpad - a platform known for attracting a large amount of investment from individual investors. However, confidence in Pump.fun quickly evaporated as the number of new projects launched on the platform decreased by up to 80% from the peak on 20/01. According to the data, in January, there were over 70,000 projects launched daily, but this number has decreased to only about 53,000 in the early days of February. Many analysts believe that after draining the cash of investors, Pump.fun has left severe consequences, causing waves of dissatisfaction and deep doubts about the quality and ethics in cryptocurrency transactions. Looking To The Future Although this downturn may be considered a 'low point' in the cryptocurrency market cycle, experts warn that, following the pattern of previous bubbles, the recovery may be slow and require time for true values to be balanced. As 'hot money' gradually withdraws, investors will need to seek out truly sustainable and practical projects instead of simply following the trend. The collapse of the meme coins market is a reminder of the risks involved in participating in 'high-intensity' investment fields that often have unpredictable fluctuations. For investors, the valuable lesson lies in the need for more caution, thorough research, and careful consideration before deciding to invest in these 'entertainment-oriented' but risky channels.