Meme Coins and AI Tokens Post Heavy Losses in 2025 While RWA and Layer 1s Outperform
CoinGecko’s 2025 narrative report shows a divergence between market attention and returns. Meme coins and AI tokens — the most followed narratives of 2025 — posted average year-to-date losses of -31.6% and -50.2%, respectively, with many large meme and AI tokens plunging between roughly 45% and 84% YTD. DeFi (-34.8%), DEX tokens (-55.5%), Layer 2s (-40.6%), Gaming (-75.2%) and DePIN (-76.7%) also recorded substantial declines. By contrast, real-world assets (RWA) led gains, up an average 185.8% YTD driven largely by Keeta Network’s 1,794.9% rally, plus strong moves from Zebec and Maple; Layer 1 chains averaged gains of 80.3%, supported by rallies in Zcash and Monero and resilience from BCH, BNB and TRON. RWA and Layer 1 were the only narratives to post a second consecutive profitable year. The report suggests speculative mania around meme coins and AI cooled amid a choppy Q4, while tokenization and RWA narratives delivered outsized returns. Key trading takeaways: risk-on speculative sectors underperformed in 2025 despite high retail interest, while fundamentals-linked narratives (RWA, select Layer 1s) produced concentrated winners — signaling possible rotation opportunities and the need for position-specific risk management.
Bearish
The report indicates a market where high retail interest did not translate into gains for speculative narratives, and many widely followed sectors posted steep losses. That pattern is bearish for short-term market sentiment: heavy drawdowns in meme coins, AI tokens, DEXs and gaming projects typically reduce risk appetite, increase volatility, and can prompt deleveraging and outflows from speculative positions. Historically, similar cycles (e.g., 2021–2022 altcoin corrections) showed that concentrated rallies often reverse sharply when momentum fades, pressuring correlated assets. However, the strong performance of RWA and selective Layer 1s suggests capital rotation toward tokenization and asset-backed projects, potentially supporting pockets of bullishness for those niches. For traders: expect continued sector rotation and elevated correlation among speculative tokens; prioritize position sizing, stop-loss discipline, and consider scouting RWA and resilient Layer 1 names as relative strength plays. Over the longer term, if RWA tokenization progress sustains fundamentals (adoption, revenue flows, regulatory clarity), these narratives could underpin more durable gains, but broad market health depends on macro liquidity and risk-on flows returning.