Crypto crash: Meme coin decline more than 50% after "Trump's tariff" declaration

Meme coin faces major loses:

Meme coins have suffered significant losses in February, with their demand dropping to pre-election levels. The entire meme coin sector has declined by 50% since President Donald Trump took office on January 20. This sharp downturn highlights the overall struggles of the meme coin market, which had previously gained momentum following Trump's election victory. Investors who once saw potential in these tokens are now facing heavy losses.

One of the hardest-hit sectors is the dog-themed meme coin category, which includes popular tokens like Dogecoin (DOGE), Shiba Inu (SHIB), and WIF. This segment has fallen by 55.5% since the inauguration. Similarly, Solana-based meme tokens, including TRUMP and BONK, saw an even steeper drop of 66.2% during the same period. These losses indicate that meme coins, which rely heavily on hype and speculation, are highly sensitive to market conditions.

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Political-themed tokens, often referred to as "PolitFi" tokens, have also taken a massive hit. Tokens such as MELANIA and MAGA have declined by 72%, reflecting growing uncertainty in the crypto space. Several factors have contributed to this downturn, including President Trump's tariff threats against major trading partners like the European Union, China, Canada, and Mexico. These concerns have sparked fears of a global trade war, causing investors to pull back from high-risk assets like meme coins.

Another key factor behind the crash was the collapse of the LIBRA token, which was linked to Argentine President Javier Milei. The failure of this token added to the overall negative sentiment in the market. According to Bitwise's Chief Investment Officer Matt Hougan, the decline of LIBRA, along with Trump's association with meme tokens, could mark the end of the meme coin trend. He believes that in the next six months, attention will shift toward fund tokenization and increased institutional adoption of Bitcoin.

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Trump's connection to the meme coin market has played a significant role in its downfall. After his election victory, the market saw a surge in meme coin investments due to expectations of favorable crypto policies. However, the recent failures of meme tokens like TRUMP and MELANIA have shaken investor confidence. As a result, the meme coin market crash has wiped out many of the gains made after the election, leaving investors uncertain about the future of these speculative assets.