The memecoin excitement observed on Pump.fun is encountering challenges, as the platform’s “graduation rate” has dropped below 1% for the fourth consecutive week.
The term “graduation rate” refers to the proportion of tokens that successfully pass through the incubation phase to become fully tradable on a Solana decentralized exchange (DEX). To achieve graduation, a token must meet certain liquidity and trading criteria.
Data from the last four weeks, starting February 17, indicates that Pump.fun’s graduation rate has remained below the 1% threshold for the first time ever.
Historically, Pump.fun’s graduation rate has not been particularly high. The platform experienced its best-performing week in November 2024, when 1.67% of memecoins transitioned to the open market. However, the significant number of tokens launched during that period inflated the importance of this percentage. In the week beginning November 11, around 323,000 tokens were created on Pump.fun, translating the 1.67% graduation rate into approximately 5,400 tokens entering Solana’s DeFi ecosystem in just one week.
As token creation volume has diminished on both Pump.fun and Solana, the weekly token graduations have significantly decreased, averaging about 1,500 tokens during the last four weeks.
### In Decline: Memecoins Struggle Despite Positive Market Signals
The declining graduation rate at Pump.fun mirrors the reduced interest among investors in memecoins, which are often perceived as speculative lottery tickets or quick cash grabs for their creators.
Several political figures have even ventured into the memecoin arena, including former US President Donald Trump. His token has plummeted by 84% from its peak recorded on January 19.
Despite some improvement in liquidity, memecoins continue to face hardships, as noted by market analysts. In February, it was observed that the strengthening US dollar had adversely affected Bitcoin prices by tightening dollar-denominated liquidity.
In recent weeks, however, the US dollar has weakened. The US Dollar Index (DXY), which measures the dollar against a selection of major currencies, saw a high of 107.61 on February 28 before dropping to 103.95 on March 14.
“The recent weakening of the US dollar has led to a rebound in liquidity indicators and some slight improvements in inflation data. However, even with these favorable changes, memecoins—which were once a significant narrative during the bull market—are still facing substantial difficulties with no sign of recovery,” said analysts in a recent report.
### Bitcoin Endures the Fallout from Memecoins
The turmoil within the memecoin market has contributed to a loss of $1 trillion in overall crypto market capitalization.
“This shift in wealth may make investors more wary about allocating additional capital, resulting in rebounds—such as those sparked by unexpectedly positive inflation data—being capped,” the report stated.
Analysts caution that this situation could lead to further declines in Bitcoin, with projections suggesting a possible retracement to as low as $73,000, a level believed to provide “strong support.”