Memecoins Spark Worst Year Yet for Crypto Token Losses

Crypto Market Decline Drives Record Number of Token Failures in 2025

The cryptocurrency industry experienced unprecedented turmoil last year, with over 11.6 million projects failing — the highest number ever recorded for a single calendar year. Specifically, the fourth quarter was among the most dire, as nearly 7.7 million tokens listed on GeckoTerminal ceased active trading during the period, highlighting the scale of market attrition.

According to a recent report by CoinGecko research analyst Shaun Paul Lee, the October market crash played a significant role in this decline. During that event, over $19 billion of crypto leverage was liquidated in a single day, igniting widespread sell-offs and market dislocation. Lee attributes this surge in failures to widespread market turbulence that persisted throughout 2025, particularly impacting the memecoin sector.

Data from CoinGecko reveals an alarming jump in crypto project failures. While over 1.3 million projects failed in 2024, the number was starkly lower in 2021, with just 2,584 projects failing. The exponential growth in failures underscores the volatile nature of the crypto space and reflects a challenging environment for new and existing projects alike.

Memecoins remain among the riskiest segments within crypto, often driven more by hype than fundamentals. Their success or failure serves as an indicator of investor risk appetite, especially amid the proliferation of new projects.

Proliferation of Memecoin Launchpads and Market Saturation

One contributing factor to the surge in token failures is the dramatic increase in coin creation. Data shows that there were about 3 million tokens listed at the end of 2024, ballooning to more than 20 million by the end of 2025. A significant driver behind this growth was the launch of Solana’s pump.fun memecoin platform in January 2024, which facilitated rapid token creation and market entry for countless memecoins.

“The simplicity and accessibility of launching tokens via launchpads have led to an influx of low-effort memecoins and projects entering the market,” Lee explained. He noted that prior to pump.fun, cryptocurrency project failures numbered in the low hundreds, and failures over the past five years accounted for just 3.4% of total failures. The ease of launching new tokens has thus disproportionately increased failure rates, further saturating the market with inactive or dead projects.

Memecoin Market Cap Accelerates in Early 2026

Despite the failures, memecoin market capitalization surged at the start of 2026. From a December 29th low of $38 billion, it climbed to $47.7 billion by January 5 — a notable increase before settling around $43.7 billion as of Monday. CoinMarketCap reports that transaction volumes have also ballooned, rising over 300% from $2.17 billion to nearly $8.7 billion during that timeframe, with intra-day gains exceeding 34% recently.

Increased activity underscores sustained investor interest despite the high failure rate, illustrating the speculative nature of memecoins that often oscillate between collapse and boom. These dynamics highlight the ongoing risks and opportunities within the volatile memecoin landscape.

This article was originally published as Memecoins Spark Worst Year Yet for Crypto Token Losses on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.