Dogecoin, PEPE, Shiba Inu and Top Meme Coin Market Reels as $5 Billion Vanishes Amid Scam Concerns and Shifting Sentiment

The meme coin sector has suffered a staggering $5 billion drop in open interest (OI) since early December, fueled by eroding investor confidence and a surge in pump-and-dump scandals. Major tokens like Dogecoin (DOGE), PEPE, and Shiba Inu (SHIB) have been hit hardest, with analysts warning that ongoing scams could delay crypto market recovery.

Open Interest Plummets Across Meme Coins

Data from blockchain analytics firm Glassnode reveals a sharp decline in open interest—a measure of active futures contracts—for leading meme coins starting December 9, 2024. By February 19, 2025, the sector’s OI collectively plunged by $5.06 billion, signaling a dramatic shift in trader engagement.

Dogecoin led the downturn, shedding $2 billion (52% of its OI), while PEPE, SHIB, and BONK saw even steeper drops of 71%, 74%, and 75%, respectively. The losses reflect a broader exodus from high-risk meme assets as investors reassess leverage positions and sentiment sours.

Market-Wide Downturn and Scandal Fallout

Futures Open Interest across memecoins sector has dropped significantly since their peaks.$DOGE's Futures OI 7D moving average saw a 58.45% decline, falling from $3.58B on Dec 9, 2024, to $1.49B today: https://t.co/5yBcLzcXMA

How do other memecoins compare? Let’s dive in 👇 pic.twitter.com/oIKRmQdsBx

— glassnode (@glassnode) February 19, 2025

The slump accelerated following a February 3 crypto market crash, which dragged down major assets like Bitcoin and Ethereum. However, the meme coin sector faced additional pressure from the implosion of LIBRA, a token tied to Argentine President Javier Milei. After skyrocketing on perceived political endorsement, LIBRA collapsed 89% within hours when blockchain analysis revealed 82% of its supply was controlled by a handful of wallets, sparking accusations of market manipulation.

This scandal intensified scrutiny over celebrity-linked meme projects, with critics highlighting vulnerabilities to orchestrated scams. “Retail investors’ trust is at risk,” cautioned Tracy Jin, COO of crypto exchange MEXC. “If cryptocurrencies become synonymous with fraud, market recovery could stall indefinitely.”

Broader Implications for Crypto Recovery

The meme coin sector’s 3% weekly decline underscores lingering bearishness, with DOGE, PEPE, and SHIB down 3%, 8%, and 4%, respectively. Glassnode analysts attribute the OI crash to a “leverage flush,” indicating traders are closing speculative positions amid volatility.

Jin emphasized that restoring confidence hinges on curbing exploitative schemes: “Protecting retail participants is critical to ensuring sustainable growth.” As the market navigates turbulence, the meme coin frenzy serves as a cautionary tale of speculative risks in an unregulated landscape.