Crypto Market Drops 18.6% in Q1 2025, Meme Coin Frenzy Fades

The cryptocurrency market experienced a significant downturn in the first quarter of 2025, with the total market capitalization decreasing by 18.6%. The market peaked at $3.8 trillion in mid-January, just before Donald Trump’s inauguration, but closed the quarter at $2.8 trillion. This decline was accompanied by a 27.3% drop in average daily trading volumes, falling to $146 billion.

Despite the overall market decline, Bitcoin managed to strengthen its position, increasing its dominance to 59.1%. This occurred even as Bitcoin's price fell by 11.8% for the quarter, from its January all-time high near $106,000 to close March around $82,500. This suggests that altcoins bore the brunt of the market correction.

One of the most notable events during this period was the surge and subsequent crash in the meme coin market. The launch of Donald Trump’s official meme coin and Melania’s shortly after sparked a meme coin craze, with thousands of tokens being created daily on the pump.fun platform. At the height of this trend, the platform hit a record of 72,000 new token deployments in a single day.

The excitement around political-themed meme coins quickly faded after Argentinian President Javier Milei promoted a token called LIBRA. The coin’s price crashed soon after his tweet, with its market cap plunging from $4.6 billion to just $221 million in a few hours following a developer rug pull. This incident significantly shook investor confidence in new meme tokens.

Though some speculated that Milei’s account was hacked, he confirmed the post was real. Later, he deleted it and claimed he didn’t know the details of the project. Investigations have now been launched—both by the government and by the courts. Some are accusing Milei of breaking ethics laws, though there’s no evidence he made money from the project.

Since the LIBRA incident, activity on pump.fun has dropped drastically. The number of new tokens deployed on the platform fell by 56.3% from its January peak, with only 31,000 being created daily by the end of March. Even the percentage of tokens that successfully moved out of the platform’s early stage, known as ‘graduated’ tokens, dropped from 1.4% in January to just 0.7%.

This decline in activity on pump.fun reflects a broader loss of confidence in the meme coin market. The initial hype and excitement around these tokens have given way to caution and skepticism, as investors become more aware of the risks involved. The LIBRA incident served as a wake-up call, highlighting the potential for fraud and manipulation in the meme coin space.

Looking ahead, the future of the meme coin market remains uncertain. While some investors may continue to be drawn to the potential for quick profits, others are likely to approach the market with greater caution. The decline in activity on pump.fun suggests that the initial frenzy around meme coins may be coming to an end, and that the market is entering a more mature phase.