After a turbulent 2025, meme coins start 2026 with a stronger footing. The sector's total market value has increased by over 30% since the beginning of the year, marking a sharp turnaround from last year's weakness.
The large gains indicate renewed speculative appetite and may signal that retail investors are returning after the holiday break.
Market data highlights meme coins outperforming.
The meme coin sector has started 2026 with strong gains. According to market data, the total market value reached over $47 billion as of January 5, a 7% increase over 24 hours. The trading volume for the sector rose to $9.2 billion, signaling a high level of activity across meme coins.
This development stands out compared to the broader cryptocurrency market. The TOTAL3 index, which excludes Bitcoin and Ethereum, has only increased by 7.5% since January 1. Meanwhile, meme coins have achieved over 30% gains, indicating a clear shift toward speculative, community-based assets.
“Memecoins are pumping again. The total memecoin market value is up $12 billion in 4 days. Once again, people realize that memes are superior compared to ALT coins. This could be the start of a wild rally,” predicts an analyst in a post.
Additionally, leading meme coins have delivered significant gains over the past week. CoinGecko data shows that Dogecoin (DOGE) has risen 20%. Shiba Inu (SHIB) has increased by 18.9%, while Pepe (PEPE) has jumped 65.6%.
The rise is not limited to the largest meme coins. Others in the sector have also seen double-digit gains, with several meme coins topping the list of winners on CoinGecko.
Why are meme coins rising?
The rise is particularly noteworthy given the sector's weak performance in 2025. Analysts believe the renewed strength in meme coins could mean that retail investors are finally returning with fresh capital after months of caution and sidelining.
Data supports this shift in sentiment. According to Santiment, the rise began shortly after fear, uncertainty, and doubt among retail traders increased late in December.
At the same time, Google Trends shows a steady increase in search interest for the term “meme coin” since January 1, signaling growing attention and curiosity from retail investors.
Some analysts also point to tax-related factors as a contributing element. Market observer Tervelix notes that in traditional markets, investors selling stocks at a loss in December to reduce taxes are subject to the IRS’s wash sale rule, which requires a 30-day waiting period before they can buy the same asset again. Purchases made before this period nullify the tax deduction.
Crypto operates under different rules. The IRS currently classifies digital assets as property instead of securities, meaning the 30-day wash sale rule does not apply.
This allows investors to sell positions at year-end and re-enter the market immediately in January, potentially reinforcing price momentum early in the year in meme coins.
“Therefore, we see in the first week of each new year (except in the bear of 2022) a massive price adjustment. Whale wallets and funds have washed out their positions to clean the tax sheet, and now they are rushing back to seize the Q1 narrative,” it states in the post.
As meme coin performance continues to capture market attention, analyst Darkfost pointed out that this could mark the beginning of a comeback for meme coins. However, the analyst added that it is still too early to draw clear conclusions.
“For more speculative investors, this could represent an interesting signal, provided they are cautious and manage risk properly,” stated Darkfost.
In the weeks ahead, the market will determine whether meme coin gains can persist or if this rise will be short-lived.