After a turbulent 2025, meme coins in 2026 start with a stronger foundation. The total market capitalization of the sector has increased by more than 30% since the beginning of the year, indicating a sharp recovery after last year's weakness.
The large profits indicate renewed speculative interest and may be a sign that retail investors are returning after the holiday period.
Market data highlights outperforming meme coins
The meme coin sector has started strongly in 2026 with nice profits. Market figures show that the total market capitalization reached over $47 billion on January 5, an increase of 7% in 24 hours. The trading volume in the sector came out to $9.2 billion, indicating a lot of activity in meme coins.
These results stand out compared to the broader cryptocurrency market. The TOTAL3 index, which does not include Bitcoin and Ethereum, has only risen by 7.5% since January 1. Meanwhile, meme coins gained more than 30% profit, indicating a clear shift towards speculative, community-driven assets.
"Meme coins are pumping again. The total meme coin market capitalization has increased by $12 billion in four days. People are realizing again that memes are better than ALT coins. This could be the beginning of a crazy rise," wrote an analyst.
Moreover, the largest meme coins have achieved remarkable returns over the past week. According to CoinGecko, Dogecoin (DOGE) has increased by 20%. Shiba Inu (SHIB) rose by 18.9% and Pepe (PEPE) even by 65.6%.
The rally is not only reserved for the largest meme coins. Other coins in the segment also recorded double-digit gains, with several meme coins appearing in the top gainers list on CoinGecko.
Why are meme coins rising?
The recovery is particularly striking given the weak performance in 2025. Analysts believe that the renewed strength of meme coins is a sign that retail investors are returning with fresh capital after months of caution and waiting.
Figures support this shift in sentiment. According to Santiment, the recovery began shortly after fear and uncertainty among retail traders peaked in late December.
At the same time, Google Trends shows that the search volume for the term "meme coin" has been steadily increasing since January 1, indicating growing interest and curiosity from retail investors.
Some analysts also point to tax regulations as a possible factor. Market watcher Tervelix notes that investors often sell stocks on the traditional stock exchange at a loss in December for tax advantage. According to the IRS wash sale rule, there is a waiting period of 30 days before you can buy the same asset again, otherwise, the tax benefit is lost.
Different rules apply to crypto. The IRS considers digital assets as property and not as securities. Therefore, the 30-day wash sale rule does not apply to crypto.
As a result, investors can sell their positions at the end of the year and immediately return to the market in January, which could strengthen the upward momentum at the beginning of the year in meme coins.
"That’s why we see a massive price reset in the first week of each new year (except for the 2022 bear market). Whales and funds have washed their positions to clean up their tax year, and now they are rushing back into the market to catch the Q1 narrative," it stated in the post.
Now that meme coin performances are attracting more attention in the market, analyst Darkfost says this could be the beginning of a meme coin comeback. At the same time, the analyst emphasizes that it is still too early to be sure about that.
"For more speculative investors, this could be an interesting signal, provided caution is exercised and risk is well managed," said Darkfost.
In the coming weeks, the market will determine whether the gains of meme coins can be sustained or if this rally will be short-lived.