TL;DR:
- A sample of 150 tokens launched on the Solana network since December 2023 took a median of 17.2 days to reach their all-time high price.
- 81% of the analyzed crypto assets recorded a drawdown of at least 90% from their record peak, taking a median of 370 days to decline by 95%.
- Only 5 of the 151 evaluated assets managed to trade above their launch price after an approximate 300-day trading period.
Coin Metrics unveiled the findings of its study focused on the lifecycle of memecoins this Tuesday. According to the institutional analytics firm, the vast majority of these digital assets suffer severe valuation collapses from which they never recover after hitting their initial market momentum.
A total of 150 tokens were evaluated, all minted across the Solana blockchain ecosystem since December 2023. The median calculated by researchers placed the peak price point just 17.2 days after the start of trading activity.
Accelerated Lifecycles and Sustained Decline in On-Chain Metrics
After hitting that ceiling, downward momentum dominated the examined sample. Figures from Coin Metrics indicate that the typical token took a median of 370 days to record a 95% depreciation from its all-time high.
Within the compiled dataset, 81% of the assets suffered a drawdown equal to or exceeding 90% from their record highs. Only 5 tokens, equivalent to 3.3% of the analyzed total, managed to subsequently return to their prior record levels.
Senior Data Researcher at Coin Metrics, Victor Ramirez, noted in issue 384 of the State of the Network report that recovery processes virtually never occur in this asset class. According to the interpretations presented in the report, on-chain activity tends to progressively fade after the initial peak without displaying sustained revivals.
The analysis of returns calculated from launch showed similar contraction patterns. Around 300 days following their market debut, most assets retained only 10% of their opening trading price.
Only five of the 150 assets evaluated by the firm sustained a price higher than the one registered on their first day of trading. In terms of technical performance, two-thirds of the tokens studied during this Solana cycle failed to produce a meaningful second rally once the initial momentum was exhausted.
The research exclusively incorporated tokens with pricing data listed on at least one centralized cryptocurrency exchange. This criterion excluded the entirety of launches that failed to graduate from automated launchpads like Pump.fun, suggesting that the analyzed sample reflects survival parameters higher than those of the broader micro-cap market.
The study highlighted that the leading assets in this category currently retain no more than 7% of their active addresses compared to their peak transactional demand periods. Among the five largest benchmarks in the segment by current market capitalization are Dogecoin, Shiba Inu, MemeCore, Pepe, and Pudgy Penguins.
Coin Metrics will present the periodic update of its on-chain activity indicators during the release of its next institutional report scheduled for next week.
