The meme coin market had a tumultuous week, with the sector experiencing a dramatic 28% drop. It fell to a market capitalization of $72.3 billion. The downturn, driven by a combination of liquidations and legal issues, has shaken investor confidence and left many wondering about the future of meme-based cryptocurrencies. Some tokens managed to stand out, showing resilience against the overall market slide. Here’s a breakdown of the week’s key events: legal troubles, new tokens, platform innovations, and other reasons to rethink the meme coin market. Meme Coin Market Faces Sharp Decline This week’s meme coin market crash has been nothing short of dramatic, with the sector losing approximately 28% of its total value. The market cap now stands at $72.3 billion, a significant drop from last week’s figures. This plummet has been marked by massive liquidations, with estimates suggesting that between $2 billion and $8 billion worth of positions were liquidated across meme coin projects. In contrast to this downward trend, one token, FU, managed to maintain its value and defy the broader market sentiment. Other tokens in the meme coin space weren’t as lucky during this deep correction the market went through. This market correction really reflects the more volatile side of cryptocurrency. Legal Troubles for Pump(.)fun and a New $200M Raise Pump(.)fun, a meme coin that has caught the eye of many, is now dealing with a securities lawsuit that threatens to short-circuit its future. The lawsuit, which centers on the token’s $500 million in fees, draws attention to the increasing scrutiny that meme coins and their progenitors are under from regulators. Even as it deals with this lawsuit and its potential fallout, Pump(.)fun claims to bring in a steady revenue stream, suggesting that there still is demand for the meme coin despite the serious troubles it finds itself in. In a turn of unexpected events, Errol Musk, father of Elon Musk, has stepped into the meme coin arena, announcing plans to raise $200 million for a new token, MUSKIT. How much interest exists in the potential raise can be judged by the seemingly inevitable headline: “Errol Musk Enters Crypto with New Memecoin, MUSKIT.” However, when one digs a little deeper into the make-believe world of meme coins and the impending Doom Hut coming to a virtual reality headset near you, one realizes that MUSKIT probably has a better chance of being a hit than some of the other Musk-related tokens (like DOGE). As the creator of the Silk Road, Ross Ulbricht is well-known. Unfortunately, he is well-known for losing a significant sum of money in the cryptocurrency space. His loss, though, has implications for the rest of us. Ulbricht’s wallets took a $12 million hit—not just because of the usually unavoidable volatility of crypto, but because a new and presumably untested crypto token was mishandled in the price-setting process. Innovation in the Meme Coin Space In the midst of the chaos, some innovation still seems to be occurring within the meme coin sector. This week sees the debut of Flaunch(.)gg, a new platform that has a somewhat unique model for charging its users. It takes 100% developer fees from the user as per usual in the meme coin space. But it also enforces a 30-minute no-sell rule that’s meant to get its users to hold onto the coins for longer instead of just flipping them. In other developments, ACT, a coin lesser known in the meme world, has shot up 35% recently after striking a partnership with Unicorn Verse, something that experts are calling a positive turn for the token. WIF, on the other hand, has seen a steep decline, down 82% from its all-time high, showing that not every project is thriving in this turbulent market climate. Market Structure and Cross-Chain Activity The meme coin market has also been in flux this week, with various cross-chain activities and market movements catching the eye. TARDI, a relatively new meme coin, has been leading the SUI chain, up 60%, and standing out as one of the few tokens with substantial growth to report during the downturn. Meanwhile, Base, a network known for its meme coin activity, has seen some measures of resilience, with tokens like SKI and HENLO managing to hold their ground as the broader market faces headwinds. A meme coin that once stirred up a substantial amount of excitement, Bitcoin Runes, has taken a sharp downturn in value. This makes the current problems of the meme coin sector even more pronounced. On the other hand, Tron, a long-time secure presence in the crypto market, had very little movement in terms of what meme coins were doing. This indicates that Tron has a much more conservative business strategy in the meme coin sector. Week in Meme Coins: Market Drops 28%, Elon’s Dad Apes In! Pump(.)fun faces new lawsuit! Elon's dad plans $200M raise! Ulbricht wallets lose $12M! Let's unpack this chaotic week in memes 1/6 pic.twitter.com/WJpgUDUDWw — CoinMarketCap (@CoinMarketCap) February 7, 2025 Market makers have also been accused, with some alleging that they have contributed to the market’s downward trajectory through orchestrated dumps. If these allegations prove true, the implications for the meme coin space could be considerable, as they would strike at the trust and transparency that investors expect and demand. The Bigger Picture: Memes vs. NFTs According to recent data from DeFiLlama, meme coins are still outperforming NFTs, even as the market struggles. DeFiLlama’s data shows that meme coins have consistently been leading the way in terms of returns. The returns have been significant enough for DeFiLlama to name meme coins as one of “the few bright spots in the crypto bear market.” Still, that doesn’t mean buying, selling, or trading meme coins is a good idea. Meme coins face some serious headwinds. Even leading meme coins like Shiba Inu and Dogecoin have faced significant sell-offs recently. However, the same report highlights significant interest in meme coins among the crypto community. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: klss/ 123RF // Image Effects by Colorcinch
