Meme Coin Mania Fades as Investors Seek Crypto with Substance

• Head of YZi Labs said that meme coin popularity has waned due to a lack of solid underlying value
• The meme coin market capitalization has fallen since November 2024
• SEC recently indicated that meme coins are not considered securities

The meme coin party might be over as investors seem to be shifting from speculative meme coins on to digital assets with strong foundations. 

Ella Zhang, Head of YZi Labs (a blockchain investment firm), told BeInCrypto that while community-led narratives initially offered more equitable investment opportunities, their popularity has waned due to a lack of solid underlying value.

According to Zhang, the initial allure of meme coins is diminishing as the market matures. Investors are becoming more discerning, seeking projects that demonstrate real-world applications and long-term viability. They want to see real value, not just viral trends.

Meme coins, such as Dogecoin (DOGE) and Shiba Inu (SHIB), gained prominence primarily through viral internet culture and endorsements from high-profile figures. However, recent analyses indicate a decreasing interest in these assets. Per YZi Labs, meme coin market capitalization has fallen since November 2024.

It’s likely that regulatory bodies have also played a role in the meme coin market shift. For instance, the US Securities and Exchange Commission (SEC) recently clarified its stance on meme coins, indicating that these assets are not considered securities. While this removes certain regulatory uncertainties, it also highlights the risks inherent in meme coins, prompting investors to reassess their portfolios in favor of more regulated and stable assets.

The Short, Brutal Life of a Meme Coin

Zhang views the success of meme coins as destined to be a passing trend. She points out 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 achieve a market cap exceeding $10 million. 

She noted that this doesn’t mean there aren’t any good meme coins but without fundamentals, sustaining value is impossible. For long-term growth, any asset needs either one or multiple underlying services, businesses, products, technologies, or innovations to fuel the price.

The diminishing appeal of meme coins seems to reflect a general 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 that are launched on the site are surviving, as token graduation is at its lowest.