Christmas Euphoria to Harsh Awakening: The Real Reason Memecoins Are Plunging

Memecoins are getting slaughtered—and it's not just profit-taking.

The Hangover Hits

Remember that holiday rally? The one where every dog-themed token with a funny name seemed to triple overnight? That sugar rush is over. The market's waking up with a pounding headache, and the charts are painted red. This isn't a dip; it's a reality check.

Liquidity Vanishes Faster Than Holiday Cheer

The core issue is simple: thin air. The euphoric pumps were built on speculative frenzy, not sustainable liquidity. When the music stops, the exits get crowded fast. Major exchanges see sell walls materialize out of nowhere, while decentralized pools evaporate—leaving latecomers holding bags worth a fraction of their Christmas Eve peak. It's the crypto cycle's oldest story, just with newer, sillier mascots.

The 'Greater Fool' Theory Takes a Holiday

These assets live and die by sentiment. The narrative shifts from 'next 100x moonshot' to 'rug pull fears' in a matter of hours. Social media, the rocket fuel for these pumps, becomes an echo chamber of panic. Without real utility or protocol revenue—just memes and hope—the floor can fall out from under an entire category in a single trading session. Some call it a correction; traders call it a bloodbath.

A Cynical Nod to Tradition

Let's be honest—watching memecoins plunge delivers a certain schadenfreude to the old guard. It's a brutal reminder that in markets, gravity always wins. The same 'geniuses' who bragged about flipping NFTs for life-changing money are now learning a classic finance lesson: what goes up on hype comes down twice as fast. It's almost poetic, if you're into that sort of thing.

This isn't the end of memecoins. They'll rise again on the next viral trend. But today's plunge is a stark, necessary reminder: in the long run, the market is a weighing machine, not a voting machine for the internet's favorite joke. Build accordingly.

In brief

• Memecoins have lost 65% of their value in one year, dropping from 100 billion to 35 billion dollars.
• Trading volume has collapsed by 72%, showing massive disinterest from retail investors.
• Politicized launches, notably the tokens of Donald Trump and Javier Milei, precipitated the loss of confidence.
• NFTs follow the same trajectory with a similar 72% drop since January 2025.

The Collapse of a Once Thriving Memecoin Market

Memecoins hit their lowest level of the year on December 19, with a market capitalization of only 35 billion dollars according to CoinMarketCap. A timid rebound took them to 36 billion the next day, but the trend remains worrying. 

This plunge contrasts sharply with Christmas Day 2024, when these assets peaked at 100 billion dollars in a festive atmosphere.

Trading volume tells an even darker story. Exchanges dropped 72% year-on-year, settling at 3,050 billion dollars.

This massive disinterest in memecoins illustrates a radical shift in investment behaviors. Retail investors, who were the beating heart of this market, have turned away from these hyper-speculative assets.

This evolution marks the end of an era. Memecoins traditionally served as a barometer to measure retail investors’ risk appetite. Their collapse reveals a market that has become more cautious, where attracting fresh capital is now challenging. Liquidity has evaporated, taking with it the enthusiasm that characterized this sector.

When Politics Accelerates the Fall

The political saga played a decisive role in this descent into hell. In 2024, the US presidential election transformed memecoins into true thermometers of electoral speculation. 

Thematic tokens flooded social networks and launch platforms, driven by an unprecedented media frenzy, as noted by CoinGecko.

However, what propelled the sector also doomed it. The heavily publicized launches of tokens associated with political figures—Donald Trump’s memecoin and Javier Milei’s Libra—marked a breaking point. 

Insider scandals and brutal price crashes eroded investor confidence. Skepticism replaced enthusiasm, turning speculative euphoria into widespread mistrust.

The NFT sector faces a similar fate. Their capitalization plunged to 2.5 billion dollars in December, their lowest level of 2025 according to CoinGecko. This 72% drop from the January peak (9.2 billion) reflects the same disenchantment. 

CryptoSlam reveals that the number of weekly sellers fell below 100,000 for the first time since April 2021, confirming the drying up of activity.

In short, 2025 will be remembered as the year of the brutal deflation of the most speculative crypto bubbles. Memecoins and NFTs, once rising stars of the ecosystem, now pay the price for their excesses. The crypto market seems to be entering a maturation phase, now favoring projects with solid fundamentals over speculative promises.

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