Trading volume on Pump.fun, a token launchpad in the Solana ecosystem, has plunged 63% from January to February 2025 due to growing skepticism towards memecoins following a series of scandals.
Decline in Trading Activity on Pump.fun
According to Dune Analytics data, Pump.fun's trading volume decreased from $119 billion to $44 billion in the first two months of 2025. In the past four days, $2.1 billion in trading activity was recorded. The number of new token listings has also dropped. After nearly 1,200 tokens per day on January 24, the number fell below 300 per day in early March. Despite this, February's trading volume was the company's fourth-largest since its launch in January 2024.
Issues with Memecoins
Memecoin trading, previously popular, has faced setbacks due to insider trading concerns and fraud. One high-profile incident was the 'Libragate,' where a token surged in popularity after endorsement from Argentine President Javier Milei, resulting in a $107 million rug pull. Anastasija Plotnikova, co-founder of Fideum, noted that memecoins have turned into tools for value extraction from retail investors. According to Plotnikova, memecoins have lost their essence, becoming a field for fraud.
Risks and Regulation
Memecoins have caught the attention of the US Securities and Exchange Commission (SEC). In a February 27 statement, the SEC confirmed that memecoins are not securities, but fraud will still be policed. This adds a new layer of complexity to trading such assets.
The current downturn in Pump.fun's trading volume and recent memecoin scandals underscore the risks in the cryptocurrency market. Investors should be cautious and monitor regulatory changes and market trends.
