Once a thriving component of the crypto ecosystem, the meme coin sector has recently seen its market capitalization plummet below $40 billion. According to CoinGecko, it now stands at $39.69 billion, marking a 3% decrease in the last 24 hours and over a 12% drop in the previous week.

This downturn signals a stark reversal from the heady days of rapid growth and investor enthusiasm.

Are Meme Coins Dead?

Industry veteran Ran Neuner has pronounced the meme coin market “dead,” attributing its decline to an oversaturated market.

“When there were few coins, the probability of you making money was actually skewed slightly more in your favor.” Neuner explains.

Shu Zhu, co-founder of the now-defunct Three Arrows Capital, agreed with Neuner. He cited the example of the flood of Neiro meme coins to highlight the saturation in the meme coin market.

“This is a great cleansing. There were way too many projects, and degeneracy. Balance is being restored. Accept it, get better, and survive,” crypto analyst Crash said.

Read more: 7 Hot Meme Coins and Altcoins that are Trending in 2024

Despite the grim market outlook, Neuner outlines two possible trading strategies for the intrepid. The first involves integrating oneself into the “cabal”—insider groups that invest early. Neuner believes that it’s a cool game if investors get in at a low market capitalization and exit before insiders dump their tokens.

“But you need to know the rules, and the rules are that the cabal is going to dump their coins on you on the way up, and you just hope that they’re going to do it responsibly so they don’t ruin their credibility, that they can keep repeating the same playbook,” Neuner said.

The second strategy Neuner proposes focuses on rejuvenating older meme coins that still have market influence and community support. This approach may offer a more stable investment avenue in a volatile market.

On the other hand, data from Lookonchain reveals a steep decline for top meme coins, with average losses of 63.73% from their peak values. Notables like Dogecoin (DOGE) and Shiba Inu (SHIB) have dropped 57.93% and 70.86%, respectively. This decline extends across the board, reflecting widespread investor retreat from these assets:

• Pepe (PEPE): -58.16%
• Dogwifhat (WIF): -70.93%
• Bonk (BONK): -64.63%
• Floki (FLOKI): -65.97%
• Brett (BRETT): -62.59%
• Popcat (POPCAT): -43.77%
• Book of Meme (BOME): -79.48%
• Cat in a Dogs World (MEW): -62.99%

Criticism has been directed at Pump.fun, a platform that enabled the launch of over 2 million meme coins. Many in the community blame it for the oversaturation that has eroded the sector’s profitability. Nevertheless, Pump.fun achieved over $100 million in revenue since its launch, a figure that contrasts sharply with the fortunes of the coins it helped create.

Read more: 11 Top Solana Meme Coins to Watch in September 2024

This downturn highlights the broader volatility and risks inherent in meme coin investments. Investors are becoming increasingly cautious, favoring projects with solid fundamentals over those driven by market whims or novelty.