The crypto market had a scare yesterday when Bitcoin and altcoins fell minutes after January’s release of the United States CPI data. With the economy heating up and inflation rising, exceeding economists’ expectations, there is concern that the Federal Reserve might have to intervene once more to lower price pressures.
The problem is, if the central bank goes this route, it could be a bloodbath for the equities and crypto markets, fast-tracking the sell-off of top altcoins.
Altcoins Dropping $234 Billion Lost in 2 Weeks
Glassnode data shows that all altcoins lost $234 billion in the last two weeks alone, marking one of the largest absolute drawdowns in over a year.
(Source)
Statistics everywhere look grim. Ethereum is trading below $3,000, losing over 40% from 2024 highs. On the other hand, Polkadot, Cardano, and Dogecoin are sliding, posting double-digit losses from November and December highs.
Only a few of the thousands of altcoins have held ground, soaking up the wave of selling pressure.
While altcoins remain shaky, Bitcoin is more resilient even after the recent cool-off.
(Source)
Though high, Glassnode observes that this drawdown is still lower than the $1.3 billion registered during the August 2023 sell-off following the yen-carry unwind. Bitcoin prices temporarily dipped to $49,000 in early August 2024 before bouncing to over $55,000.
Blame Meme Coins and Pump.fun?
The altcoin dip could be linked to the rise of meme coins and the emergence of launchpads like SunPump on Tron and Pump.fun on Solana. Some observers directly blame meme coins and rapidly shifting investor preference for the lull and general underperformance in the altcoin scene.
According to Coingecko, the total market cap of meme coins is above $78 billion, at one point rising to over $120 billion, a nearly 3X rise from Q3 2024 averages. Top meme coins like Trump, Pepe, Dogecoin, and WIF command billions in market cap, rewarding early investors heavily.
(Source)
For example, TRUMP rallied from around $4 to $72 on launch before retracing. Other meme coins like PNUT exploded, gaining over $1 billion in market cap in less than 36 hours after launching.
Their gains far outperform those of top altcoins, including Aptos and EigenLayer. Then again, most of these altcoins are venture capital-backed.
Did Meme Coins Create a Permanent Paradigm Shift in 2025?
The success of meme coins reveals that launchpads such as Pump.fun fundamentally alter how capital flows in the crypto space. Gone are the days when investors would do their due diligence and buy a token with solid utility.
Since launch, Dune Analytics data shows that over 7.6 million meme coins have gone live.
(Source)
Instead, looking at recent trends, investors are keen on high-risk, high-reward meme coins. Most of these tokens launch on Solana, and occasionally on other chains like Tron.
As investor preference shifts, speculative capital is being rotated away from top altcoins, funds that historically pumped prices, to meme coins. The result has seen meme coins soar, even with risks of rug pulls and insider trading.
Several factors could explain why investors and traders opt for meme coins over altcoins. Among them, regulations play a role. Operations like ChokePoint 2.0 by the United States Securities and Exchange Commission (SEC) meant investors had to stay away from altcoins.
Earlier, the agency claimed that Cardano, Solana, and Decentraland were unregistered securities.
Accordingly, projects, developers, and traders had to adapt and be creative, fanning meme coin demand.
And it’s easy to see why. Unlike IEOs or IDOs, anyone can launch a meme coin without any technical expertise. If the meme coin goes viral, the issuer can mint millions. Issuers of Moo Deng, PNUT, and thousands of others raked in millions.
EXPLORE: Dave Portnoy’s New Meme Coin Went 100,000% But What Is The Best Meme Coin to Buy?
Join The 99Bitcoins News Discord Here For The Latest Market Updates
Altcoins Falling: What You Should Know
- Altcoins lose over $230 billion in two weeks
- Meme coins attracting capital as investor preference change.
- Will altcoins continue to drop as long as meme coins surge?
The post Altcoins Lose Over $234 Billion in Two Weeks: Blame Meme Coins? appeared first on 99Bitcoins.
