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Memecoin and AI tokens plummeting: what's behind the collapse?
By Davide Grammatica
From their highs in December 2024, the memecoin and crypto-AI world has suffered a real collapse, despite the DeFi world being more alive than ever
What's happening to memecoins?
The beginning of 2025 has been particularly turbulent for the crypto market. The new pro-crypto policy in the US is determining the trend in the sector, but looking at the numbers more closely, not everything seems to be going well.
This has been particularly noticeable among retail investors most exposed to the altcoin world, who have had to face the difficulties of various categories of tokens over the last month, starting with memecoins and crypto-AI.
As a whole, the most capitalized memecoins have fallen by about 50% from their peak in December 2024, losing substantially all that they had gained in recent months (following Trump’s election).
This trend involves all altcoins in general, with the exception of XRP and BNB, but it affects some categories more than others. While a decline since last December is common to all assets, the resilience of the major DeFi protocols is also evident, demonstrating how the new Trump administration is still decisive in determining the price trend of some tokens.
Investors' change of approach
On the other hand, disastrous performances have been recorded by some of the most hyped tokens in recent months, such as MOTHER, DADDY, TRUMP, and MELANIA, with the latter having plummeted by over 80% from its ATH.
Evidently, many investors are changing their approach to the sector, shifting their attention towards more “concrete” applications. In fact, tokens linked to risk-weighted assets are performing well, to the detriment of more speculative solutions.
Furthermore, it cannot be ruled out that the “presidential” favor shown to the memecoin world has contributed to alarming some investors, and not only from a regulatory point of view. In the US, Democratic Senator Elizabeth Warren has already taken steps to obtain institutional oversight of the sector, and this time with the favor of a part of the community, concerned for example precisely by the tokenomics of TRUMP and MELANIA.
