- Analysts argue that capital inflows into speculative tokens by Pump.fun could delay altcoin season.
- Can this divert liquidity from established utility projects like Ethereum?
Analysts criticize the new pump-and-dump tokens on the platform as a potential diversion of altcoin capital, thus delaying the anticipated altcoin season.
Historical trends suggest an eventual shift to altcoins, as FOMO is the key factor in the rising numbers of degen traders in this hyped speculative trading.
Solana [SOL]-based memecoin platform, Pump.fun, has sparked mixed reactions in the market after recording 52,000 token launches on the 7th of February.
Investors have expressed concerns about the impact of this trend on liquidity in the 2025 altcoin market. Some analysts argue that the rising capital inflow into memecoins might catalyze the delay of the altcoin season this year.
Renowned analyst Ash Crypto ignited the debate with this X (formerly Twitter) post. He said,
“ 52,000 tokens were launched on pump dot fun yesterday, and you wonder why we are not getting Altseason.”
He claimed that traders have been excessively “gambling” their money on Pump.fun memecoins lately.
The ease of creating memecoins on the platform attracts huge numbers of degen traders hunting quick gains more than long-term investors who bet on long-term and established utility altcoins.
Current memecoin mania
Recently, Pump.fun has witnessed an increased number of wallet addresses, showing growth in speculative trading amongst investors.
Despite many token launches, 80% of memecoins in the platform plunged from their peaks shortly after their hyped launch. This puts profits on a few insiders and heavily punishes latecomers.
On-chain metrics show a correlation between the start of President Donald Trump’s administration and the surging numbers of degen traders. In fact, the President’s family has shown support for memecoins by the launch of $TRUMP and $MELANIA memecoins.
Source: Dune
Pump.fun’s billion-dollar revenue
Pump.fun’s revenue has skyrocketed lately, especially after the launch of $TRUMP and $MELANIA memecoins celebrating President Donald Trump’s swearing-in.
Analysts argue this huge capital inflow could have gone into utility altcoins like Ethereum and associated projects to jumpstart the altcoin season.
The liquidity distraction benefits the Solana ecosystem but lacks a long-term impact on advancing blockchain utility and adoption.
According to SigmaSquared on X, Pump.fun made $1B in revenue in 2024. It also ranked 10th among top “gambling” companies of the year.
Source: X
Historical comparison of memecoins
Other memecoins like Dogecoin, and Shiba Inu had a lasting impact within their communities. However, Pump.fun memecoins lack community support, similar to most coins in the 2017 ICO bubble that crashed a few weeks after launch.
While memecoins excite early buyers, most investors end up frustrated. As a result, we could see a shift toward utility altcoins as investors diversify to avoid losses, and the start of altcoin season this year.
