Memecoins face decline but may return

Memecoin activity has significantly cooled following a series of failed launches and rug pulls, notably the "Libragate" scandal, according to CoinGecko founder Bobby Ong.

The launch of President Donald Trump's TRUMP (CRYPTO:TRUMP) memecoin in January initially boosted interest, but subsequent events have led to a decline in investor enthusiasm.

Metrics from Pump.fun, a popular token launchpad, show a drastic drop in new token creations and graduations, falling over 90% since their February peak.

The total market capitalisation of memecoins peaked at $124 billion in December but has since halved to $54 billion.

Ong noted that the Libra (CRYPTO:LIBRA) launch, which saw insiders profit at the expense of most investors, was a significant blow to the memecoin market.

However, he believes that memecoins are inherently "seasonal" and will likely return in the future.

Successful memecoins like Dogecoin (CRYPTO:DOGE), Shiba Inu (CRYPTO:SHIB), and Bonk (CRYPTO:BONK) have endured market cycles by building strong, passionate communities.

"The most successful memes are those that have managed to build cult-like communities who are extremely passionate about a cause, who won’t sell and can create content or stories organically," Ong stated.

In the broader context, the memecoin market reflects the volatile nature of cryptocurrencies, where trends can quickly shift based on market sentiment and external events.

Despite current declines, memecoins remain a dynamic part of the crypto landscape, with potential for resurgence as market conditions change.

The influence of AI and celebrity endorsements on memecoins is also notable, with AI-driven trading algorithms impacting price movements and trading volumes.

As the crypto market evolves, the role of memecoins will continue to be shaped by these factors, potentially leading to future revivals in popularity.