The meme coin party might be over as investors seem to be shifting from speculative meme coins

Ella Zhang, Head of YZi Labs (a blockchain investment firm), told BeInCrypto that while community-led narratives initially offered more equitable investment opportunities

Investors appear to be pivoting away from speculative meme coins and toward digital assets with robust foundations. This shift is evident in the declining market capitalization of meme coins, a trend that began in November 2024, as noted by YZi Labs, a blockchain investment firm.

Ella Zhang, Head of YZi Labs, highlighted that while community-led narratives initially provided more equitable investment opportunities, their popularity has dwindled due to a lack of substantial underlying value.

As the market matures, the initial attraction of meme coins is fading, Zhang stated. Investors are becoming increasingly selective, seeking projects that showcase real-world applications and long-term viability. They are interested in observing real value rather than viral trends.

Meme coins, such as Dogecoin (DOGE) and Shiba Inu (SHIB), rose to prominence largely through viral internet culture and endorsements from well-known figures. However, recent analyses indicate a diminishing interest in these assets.

According to YZi Labs, meme coin market capitalization has been steadily declining since November 2024. This shift might be attributed to regulatory bodies clarifying their stance on meme coins. For instance, the US Securities and Exchange Commission (SEC) recently stated that meme coins will not be considered securities.

While this removes some regulatory uncertainty, it also underscores the inherent risks of meme coins, prompting investors to shift towards more regulated and stable assets in their portfolios.

The Short, Brutal Life of a Meme Coin

Zhang views the success of meme coins as a passing fad. She adds that while 40,000 to 50,000 crypto tokens are created daily, the average lifespan of a liquid meme coin is a mere 1.3 hours, and only about 5% of them manage to achieve a market cap exceeding $10 million.

“This isn’t to say there aren’t any good meme coins but without fundamentals, sustaining value is nearly impossible. For any asset to grow in the long term, it needs one or multiple underlying services, businesses, products, technologies, or innovations to fuel the price.”

The diminishing interest in meme coins appears to reflect a broader maturing sentiment within the cryptocurrency market. For instance, Pump.fun, the popular memecoin launchpad hosted on Solana, has seen better days recently.

Fewer meme coins launched on the site are surviving, and token graduation is at its lowest. This indicates that the new wave of meme coins is struggling to gain traction compared to previous batches.