Why are Meme coins the first to be affected behind the failure of a 11.6 million project?

The crypto market in 2025 experienced a major cleansing. Data shows that approximately 11.6 million crypto projects failed throughout the year, setting a new historical high, with Meme coin-related tokens bearing the most significant impact, becoming the core target of the market purge. This figure not only reflects the high volatility of the market but also exposes the risks accumulated during the industry’s rapid expansion.

How Severe Is the Market Cleansing

Compared to historical data, this round of cleansing has been unprecedented in its intensity.

Failed projects mainly concentrated in Q4 of 2025. CoinGecko analyst Shaun Paul Lee pointed out that between October and December, about 7.7 million tokens ceased trading on GeckoTerminal. Among them, the market plunge on October 10 became a critical turning point—over $19 billion in leveraged positions were liquidated on that day, accelerating the exit of many high-risk projects.

What does this mean? According to CoinGecko’s definition, “failed projects” are tokens that once had active trading on GeckoTerminal but subsequently stopped trading entirely. In other words, this is not just project teams giving up development, but a complete exit of funds and market liquidity drying up.

Why Meme Coins Became the Hardest Hit

The poor performance of Meme coins in this cleansing cycle fundamentally stems from the fragility of their business model.

Emotion-driven, lacking fundamentals

The value of Meme coins depends entirely on social hype rather than real application scenarios. When market sentiment reverses, these tokens bear the brunt. In contrast, projects with actual functions and ecosystem support at least have fundamentals backing them, whereas Meme coins are typical “rise first, fall later” assets. This characteristic is fully exposed during market volatility.

Uncontrolled supply expansion

Deeper issues lie in the explosive growth of tradable tokens in a very short period. GeckoTerminal data shows that the number of tradable tokens increased from about 3 million at the end of 2024 to nearly 20 million by the end of 2025—an increase of 566% in just one year.

What drives this? The proliferation of low-threshold token issuance tools, especially with the launch of pump.fun in the Solana ecosystem. After pump.fun launched in early 2024, the cost of issuing new tokens plummeted, leading to a flood of projects with very short lifespans and lacking ongoing development capacity. These projects often follow a “one-click generation, rapid pump, quick exit” cycle, further increasing failure rates down the line.

Early 2026 Rebound: Opportunity or Trap

Interestingly, despite the large number of projects failing in 2025, the Meme coin sector showed signs of rebound in early 2026. According to CoinMarketCap data, the sector’s market cap rose from about $38 billion at the end of last year to $47.7 billion in early January, then fell back to around $43.7 billion.

Drivers of the rebound

Several factors contributed to this rebound: first, a natural recovery of market sentiment; after Q4’s intense volatility, some funds started seeking new hotspots; second, the staged strength of leading Meme coins like PEPE, BONK, FLOKI, which drove sector rotation; third, continuous new Meme coins launched on exchanges injected fresh liquidity into the sector.

Risks to watch

But whether this rebound can sustain remains uncertain. Recent reports indicate that many Chinese Meme coins have been launched in quick succession, with names ranging from “Binance Life” to “I’m Coming, Damn It,” with entry thresholds so low that “as long as it’s a meme, it can go live.” This phenomenon clearly shows that the market is repeating last year’s mistakes—replacing value with hype, substituting emotion for fundamentals.

Historical experience suggests that Meme coins often experience short-term explosive growth after listing on top exchanges, but are usually followed by sharp declines as investors take profits. The trap of “peaking at listing” has played out repeatedly.

Summary

The 11.6 million failed projects in 2025 are essentially a market correction of over-expansion. Meme coins became the hardest hit not by chance, but because of their lack of fundamentals and reliance on emotion. The uncontrolled supply explosion—from 3 million to 20 million tokens—is the root cause of this cleansing.

While the early 2026 rebound draws attention, caution is advised: is this a normal market sentiment recovery or the beginning of a new bubble? The answer depends on whether you can distinguish between emotion-driven movements and value support. For participants, understanding that Meme coins are primarily emotional games—not investments—may be more important than chasing any rebound.