Coinbase stated that the latest update from its regular review of coins traded on the platform was the reason for suspending the trading of these memecoins.
Coinbase has revealed it would disallow the trading of the FLOKI, GIGA and TURBO memecoins in New York. This change will go into effect at 2:00 PM ET on Apr. 14, 2025.
Although Coinbase cited a standard assessment, certain legal justifications could have influenced the decision. The news did not cause panic in the cryptocurrency market; instead, these tokens’ prices increased following Coinbase’s statement.
Why Is Coinbase Disallowing Trading on These Memecoins?
Coinbase claims that the decision was made after its regular review procedure: They only made that announcement, and legal experts foresaw potential consequences.
However, Ariel Givener, a popular Web3 attorney, believes the connection is related to an ongoing legal issue in New York involving Coinbase. Coinbase launched these tokens as a part of its continuous project expansion.
For instance, after the crypto exchange listed FLOKI in November 2024, its price peaked for five months. In December 2024, Coinbase integrated TURBO and GIGA, resulting in 15% and 37% price increases, respectively.
When tokens are listed, their prices rise due to the “Coinbase Effect” but eventually fall. The tokens mentioned above will no longer be available to all Coinbase users in New York, although trading on them can still go on in other regions.
Are Memecoins Influencing the Crypto Market?
Though thought of as fun projects, memecoins are now a serious industry. Pump.fun, a platform built on the Solana network, was officially launched in January 2024. More than 8.5 million meme tokens have been created on it.
Also read:Since memecoins don’t have an ownership structure or create passive income, the SEC claims they aren’t securities. Hence, for now, they are not subject to SEC regulation.
Meanwhile, MEXC COO Tracy Jin has claimed that memecoins will improve the DeFi space. However, he cautioned that investors should research these currencies and prepare for erratic market conditions.
He added that Coinbase just took a step that would change the cryptocurrency market, demonstrating its constant evolution.
Pump.Fun’s Memecoin Graduation Rate Drop
With the platform’s ‘graduation rate’ falling below 1% for the fourth consecutive week, Pump.fun is reaching a brick wall. This rate refers to tokens that complete the incubation period and become fully traded on the Solana decentralized exchange (DEX).
Still, a token must fulfill certain liquidity and trading conditions to graduate. According to on-chain data from Dune Analytics, Pump.fun’s graduation rate has stayed below 1% for the last four weeks, beginning on February 17.
This is the first time this has happened since the platform’s launch. Pump. fun’s graduation rate has always been low.
Its best week was last November, when 1.66% of memecoins built on this platform became available on the open market. But at the time, this percentage was more critical than it is currently because of the greater number of tokens that were introduced on the market.
The 1.67% completion rate equated to about 5,400 tokens joining Solana’s decentralized finance economy in a week since 323,000 tokens were minted on Pump.fun during the week beginning November 11.
Dune Analytics showed that weekly token completion has fallen to a four-week average of about 1,500 coins at the time of writing due to a decline in the volume of token production on both Pump.fun and Solana.
Favorable Market Conditions No Longer Affect Memecoins
Pump.fun’s declining graduation rate reflects investors’ declining interest in memecoins, which they now consider as quick money grabs for its inventors or as degenerate lottery tickets. President Donald Trump of the United States is among the political leaders who have launched their memecoins.
CoinGecko data showed that Trump’s token dropped 84% from its peak on January 19. Matrixport added that despite increased liquidity, memecoins continue to have difficulties.
Analysts at Matrixport observed in February that the strong growth of the US dollar has pressured Bitcoin’s price by reducing dollar-denominated liquidity. The value of the US dollar has declined since then.
The US Dollar Index (DXY), which compares the dollar to a basket of major currencies, reached a high of 107.61 on February 28 and fell to 103.95 on March 14. Recent declines in the value of the US dollar have resulted in a recovery in liquidity metrics.
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