Meme coins may have appeared to be heading to the moon a couple of years ago, but they ran out of fuel and crashed back down to Earth.
The combined value of cryptocurrencies centered around a cultural meme or internet jokes—Dogecoin, Shiba Inu, Fartcoin, and Pepe, for example—has cratered almost 82 percent since reaching record highs in November 2024.
Eighteen months ago, the total market cap of these coins was more than $135 billion. As of June 16, they are worth less than $25 billion.
While meme coins have shown signs of on-again, off-again rebounds, they have struggled to regain the momentum of the crypto craze’s peak in late 2024.
Dogecoin, which exploded in popularity due to trillionaire Elon Musk’s fandom, remains the largest meme coin. According to CoinMarketCap data, it is worth more than $13 billion.
The meme coin crash is a symptom of the broader bearish sentiment in the $2.2 trillion cryptocurrency sector lately.
Profit-taking, pump-and-dump schemes, and liquidations have plagued the meme coin market—and the broader crypto sector.
Bitcoin Bulls and Bears
Bitcoin, which maintains about two-thirds of the industry’s market cap, has weakened substantially. The price of bitcoin has declined by about 30 percent over the last 12 months, falling below $66,000.
Other major cryptocurrencies have also slumped year-to-date, including ethereum (40 percent), ripple (34 percent), solana (40 percent), and monero (20 percent).
Prediction markets suggest the worst is still ahead for crypto. Polymarket, for example, has 53 percent odds that bitcoin will trade below $50,000 this year.
A major factor for bitcoin has been its decoupling from the tech boom, says Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Traders have been putting their money into hot trades, particularly the artificial intelligence-related rally, that have delivered solid returns.
“They have delivered higher returns than bitcoin while benefiting from actual earnings growth that justifies at least part of their price gains, also explaining the deteriorating interest in harder-to-price cryptocurrencies,” Ozkardeskaya said in a note emailed to The Epoch Times.
As crypto became more accepted in mainstream finance, bitcoin traded similarly to equities.
Rising government bond yields and expectations for higher-for-longer interest rates have weighed on the speculative asset, she added.
Regulatory uncertainty is also hanging over the crypto space.
Despite the White House urging Congress to resolve the Clarity Act, lawmakers continue debating the legislation.
The Digital Asset Market Clarity Act is a major crypto regulation bill that would establish a legal framework for digital assets by classifying them as securities, digital commodities, or stablecoins. While it passed the House last summer, it has yet to be approved in the Senate.
Sen. Tim Scott (R-S.C.), chairman of the Senate Banking Committee, said the top goal is protecting consumers.
“Digital assets are part of the future of finance, so every single industry will want to be a part of that, including banks. What we’re talking about today is how do we set the rules of the road so that we protect our consumers?” Scott said in a June 11 interview with Fox Business.
Adding fuel to the fire were MicroStrategy’s widely reported bitcoin sales.
For the first time in more than three years, MicroStrategy sold 32 bitcoins for about $2.5 million to fund preferred stock dividends. Critics were quick to point out Executive Chairman Michael Saylor’s calls to “never sell” bitcoin, but he dismissed these complaints.
“I said to you, never sell your bitcoin. I never said that the company wouldn’t sell its bitcoin,” Saylor said at a recent event in Prague, shared on X.
The company purchased almost 1,600 bitcoins for $100 million shortly after, Saylor said in a June 15 post on X.
It is unclear what the next catalyst for bitcoin and other cryptocurrencies will be as digital tokens attempt to attract fresh capital while also remaining under pressure.
