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During the day this Wednesday, the Cryptocurrency market experienced a sharp collapse. The most important tokens suffered a strong decline and many of them remain in the red this Thursday. In the particular case of memecoins, they suffered a sharp decline in their market capitalization.
In his customary press conference after the FOMC meetings, Federal Reserve Chairman Jerome Powell spoke about Bitcoin. Specifically, he was asked about the new Trump government’s proposal to incorporate BTC into the country’s strategic reserves. Powell’s words were clear contempt for the idea, although he left everything in the hands of Congress.
This lack of disposition from the central bank did not go down very well in the cryptocurrency market, which reacted downwards almost immediately. The price of BTC, which was already showing some wear after its recent all-time highs, briefly lost the $100K barrier.
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This reaction from the largest cryptocurrency had a clear impact on the rest of the altcoins. In the case of memecoins, they suffered a strong blow to their market capitalization. According to recent data, the valuation of the sector fell from $115 billion to the current $105 billion.
After this Wednesday’s general decline in the crypto market, the capitalization of memecoins falls to $105 billion. Source: CoinMarketCap
Capitalization of memecoins continues to decline
The decline of memecoins is clearly expressed among the most important tokens in this sector. For example, Dogecoin retreats to $0.36 per token at the time of writing. The latter translates into a return of -6% within 24 hours. Meanwhile, on a weekly basis the decline accumulates -12.21%.
The rest of the important tokens such as SHIB, PEPE, BONK and WIF suffer greater drops. Taken together, all of this is causing the market capitalization of the sector to suffer a painful collapse.
The decline of the meme coin market in recent weeks, especially since mid-November, is remarkably curious. After an explosive rise led by DOGE, these tokens do not seem to arouse the interest of investors as they did in other stages of the year.
Now, capitals seem to be looking for tokens backed with greater fundamentals and moving away from speculation, causing the capitalization of memecoins to lose ground.
As is well known, the vast majority of meme coins lack real underlying value and their strength is based on speculative trading. The latter makes them high-risk assets compared to tokens from other sectors.
In any case, this tendency to abandon risk is manifested in the data from sites like Artemis. According to this portal, during the last 30 days the memecoin sector has experienced a performance of -9.3%. Meanwhile, tokens from rival sectors, such as DeFi, see +38% in the same period. Gaming tokens exceed 26%.
The latter contrasts with the positions of a few months ago, when memecoins were the queens of performance.
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