'End of the memecoin boom': crypto market capitalization at its lowest in three years

After reaching new heights in the wake of Donald Trump's inauguration, the cryptocurrency market is going through a new period of turbulence. On Tuesday, February 25, bitcoin fell below $90,000, falling 7% in one day. The asset is still trading below this threshold. At 9:40 a.m. this Wednesday, bitcoin is trading around $88,300 on CoinMarketCap.

In its fall, bitcoin plunged the crypto market into the red, with some altcoins falling more sharply, such as solana and dogecoin which lost 17% respectively over a week.

On Tuesday, the total capitalization of the crypto market hit $2.86 trillion, the lowest since November 2021, The Block reports. Since then, it has increased slightly, weighing in at $2.91 trillion on Wednesday. But it remains far from its all-time peak of $3.70 trillion in mid-December 2024.

“What cryptocurrency is digesting right now is the end of the memecoin boom,” says Matt Hougan, CIO of crypto firm Bitwise. He’s referring to some tokens that have discredited the market, such as the Libra cryptocurrency released by Argentinian President Javier Milei or the eponymous token launched by Melania Trump.

"What we are seeing now is another short-term tactical pullback, far from a structural decline," says Richard Teng, CEO of crypto exchange Binance.

As a reminder, bitcoin was weakened this Friday following the giant hack of the crypto exchange Bybit, to the tune of 1.5 billion dollars. In a few hours, bitcoin thus went from 99,400 dollars to 95,000 dollars on the same day.

On the other hand, investors are worried about a trade war between the United States and its main economic partners. In this context, they prefer to get rid of their risky assets, including cryptocurrencies.