The memecoin market experienced dramatic swings in December 2024, with its total market capitalization surging to a peak of $137 billion before plunging to $92 billion by the end of the month. Traders witnessed extreme volatility, with over $40 billion wiped out within weeks, reflecting both the opportunities and risks in this highly risky and speculative sector.
$40B wiped out from the memecoin market in weeks
Memecoins, known for their viral appeal and community-driven value, saw a 30% decline in market capitalization throughout December, indicating a slowdown in demand and momentum. According to CoinMarketCap, the total market cap for memecoins stood at $120.14 billion on 1 December 2024. This figure climbed to an impressive $137.06 billion on 9 December 2024 but plummeted to $92.67 billion by December 23—a sharp 32.38% drop in just two weeks.
Despite the downturn, December began with a flurry of activity. Binance.US, the U.S.-based arm of Binance, listed Pepe (PEPE), a popular memecoin, on December 4. The listing fueled intense trading activity as the exchange aimed to capture a share of the lucrative memecoin market. Similarly, Coinbase expanded its memecoin offerings, adding tokens such as Moodeng (MOODENG), Mog (MOG), and Dogwifhat (WIF). Still in December, the Pudgy Penguins team executed one of the biggest Solana ecosystem airdrops, where millions of Solana wallet users were airdropped PENGU tokens based on their onchain footprints and age of wallets.
Read also: Memecoins dominate crypto trading on decentralized exchanges.
The rise and fall of memecoins
Pepe, a memecoin inspired by the internet-famous frog meme, saw unprecedented growth following its listing on Binance.US. At the start of 2024, Pepe had a modest market cap of $591 million. However, following its listing, the token’s market cap skyrocketed to over $11 billion, marking an 18x increase in value within a year.
Per Coingecko data, PEPE price reached an all-time high of $0.00002803 on 9 December 2024, briefly surpassing Uniswap’s token in market capitalization. At that time, PEPE’s market cap stood above $11 billion. However, the memecoin’s valuation has dropped to $7.64 billion at the time of writing while UNI boasts a market cap of $7.84 billion.
This unstable growth highlights the speculative nature of memecoins, where sudden hype and market sentiment can drive substantial price fluctuations. Moreover, the memecoin market’s overall decline in December reflects waning enthusiasm among crypto traders.
While Pepe grabbed headlines with its dramatic rise and fall, newer entrants like PENGU has made a name in the memecoin space. Inspired by penguin-themed internet culture, PENGU has quickly gained traction, leveraging a strong online community and rewarding airdrop strategy. Its support by top crypto exchanges has also attracted a loyal following, driving consistent trading volumes.
Notably, PENGU recently overtook Bonk (BONK) to become the largest memecoin on the Solana blockchain, reaching a market cap of approximately $2.65 billion. However, its market cap has dropped to $1.94 billion at the time of writing, representing a 9.7% decline in the past 24 hours. Likewise, its market price has plunged to $0.03 as of Monday — a 54.3% fall from its all-time high of $0.068 per Coingecko data.
While PENGU’s recent surge has challenged BONK’s dominance in the Solana memecoin market, Bonk is still standing strong with a market cap of $2.37 billion at the time of writing. Emerging as a grassroots effort to invigorate Solana’s ecosystem following a challenging 2023, the token’s dog-themed branding and low-cost transactions continues to attract widespread adoption among Solana users.
Current standing of the memecoin market
At the time of writing, the memecoin market cap stands at $99 billion, an 18% decline from its performance at the beginning of December.
The volatility highlights the challenges traders face in navigating this niche segment of the cryptocurrency market. Particularly, many traders who entered the memecoin space during its peak in December 2024 may now be grappling with significant losses.
The December downturn further raises questions about the long-term sustainability of the memecoin market. These tokens, often launched as jokes or experiments, rely heavily on community support and viral trends to maintain value. While some, like Dogecoin (DOGE), Shiba Inu (SHIB) and Pepe, have seen extraordinary gains, the rapid market swings highlight the inherent risks of investing in memecoins.
Notably, the original memecoin, DOGE, continues to hold a commanding presence in the market, with a market cap of over $46 billion at the time of writing. While DOGE has seen reduced volatility compared to newer tokens, its widespread adoption for tipping and payments ensures its ongoing relevance. Also, SHIB has maintained its place as the second-largest memecoin with its market cap sitting above $12 billion. It bears mentioning that the launch of Shibarium, Shiba Inu’s layer-2 scaling solution, has further bolstered its ecosystem, attracting developers and projects.
Read more: Understanding the Pros and Cons of Memecoins as an Investor
