Crypto markets are kicking off the new year with a strong rally, especially in the altcoin and memecoin categories. After a slow end to 2025, traders are jumping back in, and smaller, riskier tokens are seeing some of the biggest gains.

Memecoins are leading the charge. PEPE, the frog-themed token with a $2.5 billion market cap, has surged more than 32% in just one day. Close behind are POPCAT and MOG, two cat-themed tokens built on Solana and Ethereum respectively, both up around 20%. Other popular memecoins like FLOKI, Dogwifhat, and fartcoin are also climbing fast.

Dogecoin, the original memecoin, is up 12%, while Shiba Inu and BONK, two other dog-themed tokens, are seeing gains of about 13%. These big moves are part of a broader trend where smaller or overlooked tokens tend to bounce back strongly at the start of the year.

Experts say this could be part of a seasonal pattern. Historically, smaller and less liquid assets that lag behind in the final months of the year often see strong recoveries in January. Traders seem to be betting that these early gains could set the tone for the rest of the year.

Despite positive developments in 2025 — like growing political support for crypto, better regulation, and successful crypto ETFs — the overall market underperformed compared to traditional assets like gold and the S&P 500. Instead of flowing into Bitcoin, investor money went into AI stocks, Bitcoin treasury companies, and precious metals.

According to analysts, some memecoins like PEPE and DOGE had dropped as much as 80% from their all-time highs after major sell-offs last year. Now, these same tokens are bouncing back as traders rotate funds into large-cap memecoins in hopes of a sustained upward trend.

AI-related tokens are also seeing big gains. ElizaOS (formerly known as AI16Z) is up more than 50%. Other major AI tokens like Render, Virtuals, and Bittensor have jumped between 8% and 13%. Even niche tokens like Goatseus Maximus, linked to an outspoken AI bot, have surged more than 12%.

Newer projects are joining the rally too. Monad’s MON token is up over 15%, and Plasma’s XPL has climbed more than 13%. These gains show that investors are also interested in emerging blockchain protocols.

On the larger end of the market, Bitcoin is up 2.4%, Ethereum has gained 4.5%, and Solana is showing a 4.9% increase. Crypto-related stocks are also performing well. A leading digital asset infrastructure firm saw its stock rise by 20%, while Semler Scientific (a Bitcoin investor) and BitMine (a large Ethereum holder) gained 13.8% and 12.5%, respectively.

Bitcoin mining stocks are having a strong start too. Companies like Cleanspark, IREN, and Riot have all jumped over 11%. Others such as Core Scientific, Cipher Mining, MARA, and Terawolf are also up, though by slightly smaller margins.

Analysts point out that positive returns in January often lead to better performance over the rest of the year. So far, this early rally is giving investors hope that 2026 could be a much stronger year for crypto markets across the board.