Meme coin market cap jumps 23% in a week… Is this a sign of a recovery in risk appetite?

At the start of the year, funds rapidly flowed into meme coins in the crypto market, causing the related market size to expand significantly in a short period.

On the 5th (local time), Cointelegraph reported that the total market capitalization of meme coins rose from about $38 billion on the 29th of last month to over $47.7 billion on that day. That represents an increase of more than 23% in just one week. Trading volume also grew nearly fourfold, from $2.17 billion to $8.7 billion over the same period.

The gains among top market-cap meme coins were also notable. Dogecoin (DOGE) climbed more than 20% over the past week, Shiba Inu (SHIB) rose about 19.9%, and Pepe (PEPE) surged over 65%. This rebound followed the meme coin market reaching a year-to-date low of $35 billion as of December 19 last year.

Industry participants interpret this trend as an early sign of a change in investor sentiment. Because meme coins are classified as highly volatile and high-risk assets, inflows into these assets suggest that investors have entered a phase of being willing to take on risk again, analysts say. In fact, the meme coin market contracted sharply during 2025, plunging about 65% over the year.

Market analysis platform Santiment analyzed that this rebound began after negative sentiment among retail investors had peaked. Santiment explained, "Markets often move contrary to popular expectations," adding, "Opportunities frequently arise in assets that investors have ignored."

Some market participants are also paying attention to the possibility that the meme coin rebound could spread to altcoins more broadly. One trader commented, "When a strong trend appears in meme coins, funds often rotate into other altcoins," and added, "In past cases, the Solana (SOL) ecosystem has often been the biggest beneficiary."