Memecoins Plunge 94% as Libra Token Insider Profits Spark Market Panic
1min read Memecoins, which gained significant traction following the launch of the TRUMP memecoin in January, have since experienced a decline in activity. This shift is attributed to a series of unsuccessful launches and rug pulls, which have dampened investor enthusiasm. The memecoin market has taken a significant hit, particularly after the launch of the Libra (LIBRA) token, which was associated with Argentine President Javier Milei. The Libra launch saw insiders cash out over $107 million, leading to a nearly 94% drop in the token's value within hours.
The enthusiasm for memecoins peaked in January when the TRUMP and MELANIA tokens were launched, drawing substantial liquidity and attention away from other cryptocurrencies. However, the subsequent launch of Libra marked a turning point, revealing the presence of insiders profiting at the expense of other investors. This revelation shattered the illusion of fair launches in the memecoin market, leading to a significant decline in investor interest.
Metrics from the token launchpad Pump.fun showed a dramatic drop in activity following the Libra rug pull. Newly created tokens and daily graduated tokens on the platform fell over 90% from their February peak. The weekly trading volume on Pump.fun, which had reached an all-time high of $3.3 billion, plummeted by 63% from January to February. Similarly, the total market capitalization of memecoins, which hit an all-time high of $124 billion in December, has since dropped to $54 billion.
Despite the current downturn, Bobby Ong, the founder of CoinGecko, believes that memecoins are not entirely dead and will likely make a comeback. He suggests that the memecoin market is inherently seasonal, with some tokens continuing to survive through fluctuating market cycles. Ong speculates that the market might be headed toward an "extreme case of power law," where the vast majority of memecoins fail, but a few rise to the top and endure. Successful memecoins, such as DOGE, SHIB, and BONK, have weathered market cycles and offer valuable lessons for creators looking to build longer-term assets.
Ong highlights that the most successful memecoins are those that have built passionate communities around a cause. These communities are not only loyal but also capable of creating content and stories organically. The shift in 