The cryptocurrency market has faced a prolonged bearish trend since Donald Trump’s inauguration in January 2025. While the market displayed resilience during his electoral win, the altcoin sector has notably struggled, shedding significant value across multiple popular tokens and asset classes. Altcoins.

A Shrinking Altcoin Market

The altcoin market capitalization, which peaked at $1.9 trillion in December 2024, plummeted to $1.2 trillion by February 2025, a staggering one-third decline in just three months. While Bitcoin reached an all-time high of $108,800 on inauguration day, altcoins had already been in a bear market for six weeks. This downturn has underscored the growing disparity between Bitcoin’s relative strength and the fragility of other crypto assets.

The Fall of Meme Coins

Meme coins, once a vibrant and speculative segment of the market, have been hit the hardest:

• Overall Meme Decline: The meme coin sector has seen over a 50% drop since Trump’s inauguration. This includes prominent dog-themed tokens like Dogecoin (DOGE) and Shiba Inu (SHIB), which collectively fell by 55.5%.
• Solana’s Meme Ecosystem: Tokens built on Solana, such as TRUMP and BONK, experienced an even greater decline of 66.2%, reflecting a loss of faith in speculative coins tied to niche themes.
• PolitFi Tokens: Coins in the political finance category, like MAGA and MELANIA, plunged by 72%, as their pump-and-dump mechanics quickly eroded investor confidence.

Underwhelming Launches and Price Spikes for PEPU and WEPE

New coin launches, despite exciting presales, failed to sustain momentum. A prime example is Wallstreet Pepe ($WEPE), positioned as a successor to Pepe Unchained ($PEPU). While Pepe Unchained raised $70 million in its presale and reached a market cap of $400 million, WEPE’s presale success of $73 million didn’t translate into sustained growth post-launch. Similarly, Pepe Unchained ($PEPU) enjoyed brief spikes, yet its overall performance succumbed to the broader bearish climate.

What Drove the Bearish Sentiment?

Tariff Threats and Trade War Concerns

Trump’s administration reignited fears of global trade wars, issuing tariff threats against key partners like the European Union, China, and Canada. These policies spooked the broader financial markets, dampening the appeal of risk-on assets, including highly volatile cryptocurrencies like meme coins.

Confidence Collapse in Meme Tokens

The association of meme coins with Trump-related themes added to investor apprehension. Tokens like TRUMP and MELANIA, once heralded as potential disruptors, instead delivered substantial losses to retail investors. The implosion of the LIBRA token associated with Argentine President Javier Milei further exacerbated skepticism in politically-themed or meme-centered crypto projects.

Lack of Regulatory Clarity

While anticipation of Trump’s return had initially raised hopes for crypto-friendly policies, his administration failed to provide regulatory clarity. This regulatory uncertainty made institutional investors wary and contributed to shrinking adoption of altcoins.

Bitcoin Price Fall  and its Ripple Effect on Meme Coins

Bitcoin’s steep decline from an all-time high of $108,000 during Trump’s inauguration to $86,000 has been a critical factor influencing the broader cryptocurrency market, including the fragile meme coin sector. This 20% drop not only highlights a weakening confidence in the leading cryptocurrency but has also dampened overall market sentiment, triggering a risk-off mentality among investors.

Meme coins, which rely heavily on speculative optimism and community-driven hype, often act as high-risk assets within the crypto ecosystem.

Closing Thoughts

The altcoin market’s downturn reflects a mix of external economic policies, a decline in speculative appetite, and the inherent volatility of meme and niche coins. Trump’s tariff policies, threats of trade wars, and lack of supportive crypto regulation have each played a role in this bleak landscape. For projects like Wallstreet Pepe, the failure to transform presale hype into long-term value mirrors the broader decline. For investors in the crypto sphere, this period has been a sobering lesson in the risks tied to speculative assets and politically themed cryptocurrencies.

Disclaimer:

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