The market capitalization of meme coins has plunged by 32% since its peak on February 3, while trading volume has dropped even more drastically, down 72%. While CoinGecko co-founder Bobby Ong believes that meme Coins are dead now, he noted that they will be back.

Ong notes that meme coins have historically been cyclical, with a small number managing to survive multiple market cycles.

The Meme Coin Collapse Explained

The launch of TRUMP and MELANIA tokens marked the peak of the meme coin mania. According to Ong, these launches drained liquidity and investor interest from the broader meme coin space and signaled the end of a speculative cycle.

The subsequent collapse of LIBRA, in particular, shattered the illusion that meme coins were fair launches and exposed the reality of insider advantages and coordinated profiteering. This led to a sharp decline in key market indicators, with metrics from Pump.fun one of the most prominent meme coin platforms falling by over 90% from their February peak.

However, tokens like OG meme coin Dogecoin (DOGE), Shiba Inu (SHIB), and even Bonk (BONK) serve as examples of how strong community-driven memes can persist, particularly those that cultivate dedicated and passionate followings. The increasing ease of launching meme coins has made competition fierce, and only those projects that successfully capture and maintain attention will have a chance to endure.

In the long run, the meme coin market is expected to follow an extreme power law, where the vast majority of tokens fail while a tiny fraction thrives, Ong said in his latest analysis.

VC Greed to Regulatory Gaps

Shifting the focus to the broader industry, Ong explained that the meme coin frenzy was partly fueled by retail investors’ frustration with venture capital (VC)-backed low float, high FDV tokens that launched at inflated valuations in early 2024.

Many of these tokens were structured to benefit early investors while offering little upside for later buyers. This frustration created a demand for alternative opportunities, which led to the rapid rise of meme coins.

The debate over launch mechanisms continues, with some arguing that structured launches like Jupiters JUP model where initial liquidity pools constrained price movements offer a better approach than volatile airdrop-driven launches. Alternative fundraising models, such as curated angel investing platforms like Echo.xyz, have also gained traction.

However, Ong argued that regulators, particularly in the United States, bear some responsibility for the meme coin boom, as their failure to establish clear token issuance frameworks has driven projects toward speculative, often meaningless tokens.

Looking ahead, Ong remains optimistic about the broader trend of tokenization, noting that the success of launchpads like Pump.fun has spurred the development of new platforms for AI agents, DAOs, and other experimental tokens. Traditional finance (TradFi) institutions are also exploring tokenization, with US treasuries leading the way and more complex financial products expected to follow.

Meanwhile, in January 2025 alone, over 600,000 tokens were created and more than 5.5 million are tracked on GeckoTerminal.