The Decline of Meme Coins: Are DOGE and SHIB Facing a Permanent Downtrend?

The meme coin sector, once a symbol of crypto's wild optimism, now faces a critical juncture. Dogecoin (DOGE) and Shiba Inu (SHIB), two of the most prominent names in the category, have seen their trajectories diverge in 2025. While institutional interest and retail speculation persist, on-chain fundamentals and sentiment analysis reveal a nuanced picture. Are these tokens entering a permanent downtrend, or are they navigating a temporary correction?

DOGE: Institutional Hype vs. On-Chain Stagnation

Dogecoin's recent surge in attention stems from the pending approval of the Bitwise Dogecoin ETF, which could bring institutional-grade exposure to the asset. According to a report by Decrypt, the ETF's filing in November 2025 followed the SEC's updated rules, easing the path for commodity-based ETFs, Decrypt reported. However, on-chain data tells a different story. Despite social media buzz-spiked by Elon Musk's "It's time" post-DOGE's daily active addresses have remained stagnant at ~37.7K, with transaction volume hovering around $125 million, Coinotag noted. Open interest in DOGE futures has also declined to $690 million, signaling reduced trader confidence, Coinotag noted.

Retail sentiment for DOGE is mixed. While the price has held above the $0.157 support level, derivatives data indicate waning bullish momentum among long-term holders, Bitget reported. The ETF's potential launch could act as a short-term catalyst, but without a corresponding increase in network utility or transaction demand, the token's fundamentals remain weak.

SHIB: Institutional Recognition and Lingering Doubts

Shiba Inu, meanwhile, has secured a foothold in institutional frameworks. The project's inclusion in the FTSE Grayscale Crypto Sectors Framework under the "Consumer & Culture" category marks a step toward legitimacy, The Crypto Basic reported. Additionally, SHIB has been identified as a candidate for a spot ETP under the SEC's GLS framework, a development that could mirror DOGE's ETF-driven optimism, The Crypto Basic reported.

However, SHIB's on-chain activity remains underwhelming. While developers emphasize the importance of Shibarium's transaction volume and token-burn cadence for long-term value, Digital Journal noted, concrete metrics are scarce. A report by Coinotag notes that SHIB's ecosystem relies heavily on speculative narratives rather than tangible utility, Digital Journal noted. This contrasts with DOGE's broader brand recognition and recent institutional tailwinds, though SHIB's Layer-2 chain offers a theoretical edge in scalability.

Retail sentiment for SHIB is further complicated by its lack of a direct ETF competitor. While DOGE investors have access to a $17 million-trading-volume ETF, Decrypt reported, SHIB holders remain reliant on decentralized platforms. This gap in accessibility could widen as institutional adoption accelerates.

The Meme Coin Paradox: Speculation vs. Utility

Both DOGE and SHIB face a common challenge: their value propositions remain tied to speculative narratives rather than functional use cases. For DOGE, the absence of smart contract capabilities-a feature under discussion for future upgrades, AOL reported-limits its utility beyond a tipping currency. SHIB's Shibarium, while promising, has yet to demonstrate robust transaction demand or developer activity, Digital Journal noted.

Retail investors, meanwhile, are caught between optimism and caution. Social media metrics for DOGE show periodic spikes, but on-chain inactivity suggests these surges translate poorly into sustained demand, Coinotag noted. For SHIB, the focus on token burns and ecosystem updates has yet to translate into measurable network growth, Digital Journal noted.

Conclusion: Temporary Correction or Permanent Downtrend?

The data suggests that DOGE and SHIB are not in a permanent downtrend but are navigating a phase of consolidation. Institutional developments-such as ETF approvals and regulatory recognition-offer short-term tailwinds. However, without meaningful improvements in on-chain utility, transaction volume, or developer activity, these tokens risk becoming relics of the 2021 meme coin boom.

For investors, the key question is whether these projects can evolve beyond their speculative roots. DOGE's ETF-driven accessibility and SHIB's institutional inclusion are positive signals, but they must be paired with concrete upgrades to network fundamentals. Until then, the meme coin sector remains a high-risk, high-volatility niche.