It’s not just the leading memecoins that are experiencing turbulence. A multitude of industry insiders have shared with Cointelegraph that the current surge of new tokens is causing ripple effects throughout the entire crypto sector. One expert even remarked that memecoins have “sucked the life out of this bull run.”

Data published by Lookonchain on September 2nd starkly illustrates the harsh market conditions for established memecoins, which have plummeted by an average of 63%.

Crypto’s most popular memes are contending with a market where the rules have fundamentally shifted.

Safe-launch services like Pump.fun and BaseJump have revolutionized the ease of launching new coins, eliminating many of the technical and financial barriers that once limited market participation. This has resulted in an increasingly competitive memecoin landscape.

Ilias Salvatore, growth lead for the token analytics tool Flooz, highlighted that the crux of the matter is attention. The rapid pace of this market is especially enticing for certain traders.

“I believe that money flows to where attention is focused,” Salvatore told Cointelegraph. “Pump.fun and Solana are currently in vogue for discovering new gems, but they cater to a specific type of degen trader, which is entirely different from trading an established meme like Pepe on major centralized exchanges. Capital rotation is inevitable, but it also hinges on your trading style and risk appetite.”

Carlos Mercado, a data scientist at blockchain analysis firm Flipside Crypto, noted that this new market dynamic fosters short-term thinking, even more so than the existing memecoin market.

“We observe on-chain evidence of rotation—volumes peak early for most memes, and traders quickly shift to newer coins,” Mercado explained to Cointelegraph.

He added that most safe-launch tokens have a lifespan of merely 24 hours, with only about 1% surviving for two to six days.

The proliferation of memecoins raises questions about its cost.

For degens participating in this market, there is always an abundance of new memecoins to choose from, with thousands being created daily. Since March, Pump.fun alone has launched over 1.98 million tokens.

Established coins now face heightened competition as countless new entrants vie for user attention and investment.

A snapshot of tokens launched on Pump.fun on September 11 revealed that only 1.3% “graduated,” achieving a market cap of $69,000, which qualifies them for trading on the decentralized exchange Raydium.

However, users seem to be at a disadvantage as successful tokens are buried under a heap of failures. In August, Cointelegraph reported that a $100 bet on Pump.fun had worse odds than a spin on a casino roulette wheel.

Recent: Bitcoin ETF security concerns grow after FBI warns of North Korean hackers

The slim chances of success have led seasoned memecoin traders to dub the current market a “slaughterhouse.”

On August 30, cumulative revenue on Pump.fun surpassed $100 million. This month alone, the platform has generated an additional $4 million.

Memecoins are stirring liquidity concerns

Some industry figures are increasingly worried about the broader impact of the memecoin market on other crypto sectors. They argue that memes are draining the vitality from the ongoing bull run.

Evan Luthra, creator of the non-fungible token housing project CasaNFT, expressed frustration over the surge in meme tokens and its wider implications.

“Memecoins are diverting all the attention, and where our attention goes, our energy follows,” Luthra told Cointelegraph. “Memecoins are mostly pumps and dumps with no inherent value.”

Slava Demchuk, CEO of compliance and blockchain forensics firm AMLBot, provided evidence supporting this view.

“It seems possible that memecoins have already drained the life from this bull run, redirecting money into rug pulls and pump-and-dump schemes. This explains the lack of liquidity in the altcoin market,” Demchuk told Cointelegraph.

Flipside Crypto’s Mercado added, “Memecoins, particularly celebrity coins without dedicated community management teams, are extracting value. The liquidity flows to deployers who then withdraw it via central exchanges.”

Josh Benaron, founder and CEO of layer-1 programmatic data blockchain Irys, believes the rapid expansion of the memecoin market is becoming self-defeating. He told Cointelegraph:

“There isn’t enough demand left to sustain the creation of so many new coins on Pump.fun.”

Benaron suggested that both legacy and newly minted memecoins are now facing a scarcity of capital.

The data appears to support Benaron’s theory. On September 8, daily revenue on Pump.fun dropped to $262,000, its lowest since May, although it has since rebounded above $400,000.

A better strategy

Luthra advocates for focusing on long-term value drivers for sustainable success in the blockchain space.

“Degens should focus on RWAs and AI because these sectors offer long-term sustainability,” he advised.

Benaron acknowledged that while memecoins can be detrimental, urging traders to change their habits is unlikely to be effective.

“Memecoins are a double-edged sword,” Benaron said. “They divert liquidity from real tech projects—distracting capital that could drive innovation. But much of that money is ‘mercenary’ anyway—capital chasing quick profits.”

More alternatives and chains

The success of Pump.fun (built on Solana) and BaseJump (built on Base) has inspired similar services across other blockchain networks, indicating that the safe-launch trend is far from over.

The Ethereum safe-launch platform Ethervista recently made headlines when one trader turned a $5,000 investment into $670,000.

On August 13, the Tron-based SunPump safe-launch service was announced, launching over 80,000 tokens so far. The platform peaked on August 21 with 7,531 tokens launched, generating $465,000 in fees.

However, SunPump’s activity and fees have significantly declined in August and early September, mirroring decreased activity on Pump.fun.

A spokesperson for memecoin Eth Bull (EBULL) told Cointelegraph that while the dip in top 10 memecoins might indicate cooling hype, it’s too early to declare an end to memecoin mania as trends can rapidly shift in crypto.

Recent: Congressional elections critical for crypto’s future in the US

Danila Pronin, chief business development officer of Tron-based memecoin IVFUN (IVFUN), said it’s challenging to definitively say whether this phase of the market has ended.

“In some areas it’s fading; in others it’s gaining momentum,” Pronin told Cointelegraph. “In general, memes won’t disappear forever. People love this class of crypto assets and will always return to it.”