Analysts Blame PumpFun For ‘Destroying Altcoin Market’

Some analysts are blaming Pump.fun, a Solana-based platform for creating and launching memecoins, for destroying the altcoin market.

In a Feb. 4 X post, Miles Deutscher, a crypto analyst, claimed the reason why there has not been a major “alt season” is because speculative capital that usually flows into the top 200 crypto assets by market cap has instead flown into low market cap coins, predominantly memecoins launched on Pump.fun.

Deutscher said unlike in previous altcoin seasons, where users' losses were limited to altcoins on centralized exchanges (CEX) with solid liquidity, they are now stuck with illiquid onchain memecoins whose prices have crashed significantly from their peaks.

Because of this, he claims that wealth is being destroyed at a faster rate than during the bear market in 2022.

Another analyst, Master of Crypto, echoed the sentiment in a Feb. 3 X post, saying that the memecoin mania on Pump.fun destroyed the altcoin market as it “siphoned liquidity from the ecosystem, diverted retail attention from real projects to memecoins, and encouraged pump and dump schemes.”

“Pump Fun fundamentally changed the game, arguably for the worse. But it has also made crypto the biggest casino on the planet, which is a powerful onboarding tool,” Deutscher added.