PEPE Leads Memecoin Rally Amid Post-Holiday Crypto Market Upswing
January 2, 2026 — By Daniel Kuhn, The Block
In the wake of the post-holiday crypto market rally, memecoins have surged notably, with PEPE emerging as the standout performer. The $2.5 billion market capitalization memecoin, named after the iconic cartoon frog, posted gains exceeding 32% on Friday, reigniting interest in meme-inspired digital assets.
Memecoin Surge Fuels Altcoin Rally
Alongside PEPE’s impressive jump, other memecoins have also enjoyed double-digit increases. Rival “cat coins” such as POPCAT, native to the Solana blockchain, and its Ethereum counterpart MOG, have skyrocketed nearly 20%. Additional meme tokens—including FLOKI, Dogwifhat, and fartcoin—follow closely behind in notable upward trends.
Classic memecoins like Dogecoin (DOGE), the oldest and largest by market cap, rose approximately 12%, while Shiba Inu and BONK, both widely recognized dog-themed tokens, increased about 13% each. This widespread memecoin uplift underscores a renewed appetite among traders after months of consolidation.
Market Experts Weigh In on Early-Year Rotation
Analysts attribute the rally partly to an early-year rotation of capital into underperforming and smaller assets, a historical pattern observed in cryptocurrency markets. Matt Sigel, Head of Research at VanEck, explained, “Assets that underperform late in the year, especially small and illiquid ones, tend to bounce more in January on average.”
Timot Lamarre, Director of Market Research at Unchained, provided context on 2025’s broader market dynamics: “Despite several tailwinds—like President Donald Trump’s open embrace of bitcoin and crypto, positive U.S. regulatory momentum, the rise of digital asset treasuries, and crypto exchange-traded fund success—crypto markets significantly underperformed traditional assets last year, trailing the S&P 500 and gold.”
He added, “Money that would typically flow into Bitcoin diverted to other assets. Risk-seeking capital focused on Bitcoin treasury companies and the AI industry, while those avoiding debasement poured into precious metals.”
Jake Kennis, senior research analyst at Nansen, highlighted the significant impact of a major liquidation event (the “10/10 liquidation”) on memecoins, noting steep declines from all-time highs—79.8% for PEPE and 81% for DOGE. He suggested the current large-cap meme token rally could be traders positioning for a rebound, though he cautioned that confirmation on longer timeframes is necessary.
Growth in AI Tokens and Crypto Stocks
The post-holiday upswing extends beyond memecoins. AI-driven crypto tokens are among the leading gainers, with ElizaOS token (previously AI16Z) soaring over 50%. Other prominent AI tokens such as Render, Virtuals, and Bittensor also posted gains between 8% and 13%. Even quirky tokens like Goatseus Maximus, associated with an AI bot, rose more than 12%.
Newly launched protocol tokens also saw notable advances: Monad’s MON surged 15.3%, and Plasma’s XPL increased 13.3%. Meanwhile, major cryptocurrencies posted more restrained but steady gains—Bitcoin rose 2.4%, Ethereum 4.5%, and Solana 4.9%.
Crypto-related stocks followed suit, with digital asset infrastructure companies showing strong performance. Semler Scientific and BitMine, both focused on Bitcoin and Ethereum holdings respectively, climbed 13.8% and 12.5%. Leading Bitcoin miners such as Cleanspark, IREN, and Riot recorded gains above 11%, while others, including Core Scientific and MARA, increased by just under 10%.
Optimism for the Year Ahead
Sigel emphasized that January’s positive returns often correlate with stronger performance throughout the year, adding a note of optimism for investors entering 2026: “It’s not surprising to see hope that today sets the tone for the month, and thus the year.”
The rally is further buoyed by broader tech enthusiasm, including Hong Kong’s IPO momentum and advancements in AI technologies, such as China adding AI-related products like smart glasses to its subsidy list. These factors contribute to a favorable sentiment for crypto miners and tech-related assets.
Disclaimer: This article is for informational purposes only and is not intended as investment, legal, or financial advice. The Block operates as an independent media outlet providing objective research, news, and data on the digital assets industry.
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