Market Watch: On-chain Pokémon card opening cools down for the first time, has speculative capital shifted to Memecoins?

Authors: Marc Arjoon & Jake Koch-Gallup

Compiled: TechFlow

TechFlow Editor's Note: On-chain gacha experienced its first monthly pullback since February, with July trading volume falling from $354.8 million in June to $290.3 million. Meanwhile, trading volume on Memecoin platforms like Pump.fun is rising. This suggests crypto speculative funds may be rotating—when Memecoin markets warm up, some gacha players turn and leave. Worth noting is that Courtyard, with the least crypto-native user base, actually hit a record high, indicating real collection demand remains strong.

The market status is quiet but lacks the final touch! Market volatility and asset correlation continue to decline, entering a calmer state. This leaves the market with the final piece to start a new bull run. Meanwhile, on-chain gacha saw its first monthly pullback since February, suggesting some speculative funds may be flowing back into Memecoins. Deep dive below.

Market Dynamics

In the past 24 hours, the 2025 crypto stock sector led the market, rising 2.6%, the only sector with significant gains. Gains concentrated in Galaxy (+3.6%) and Circle (+3.1%), both companies just announced Q2 earnings. Circle benefited from low expectations after Morgan Stanley previously slashed the target price by 64% to $38. But the strength range is narrow. Bullish (-1.5%) and Gemini (-0.6%) closed lower, and the broader crypto stock index fell 1.1%. This indicates the rise was driven by company-specific earnings reactions, not a revaluation of the entire sector.

Excluding this sector, market performance leaned negative. While the stock market consolidated below record highs this week, BTC fell 0.4%, basically consistent with Gold (-0.4%) and S&P 500 (-0.3%). BTC's downside resilience to stock market pullbacks again failed to translate into upside participation. Relative strength is instead a story within crypto. BTC topped the digital asset sector, long-tail assets sold off, led by Meme (-5.0%), Solana Ecosystem (-3.4%), and AI (-2.7%).

As mentioned in yesterday's article, we know crypto ETF fund flows have been weak. BTC and ETH ETF fund flows are becoming increasingly synchronized. Their 60-day rolling correlation has risen to +0.67, near the top of the range. ETF demand performs more like a single crypto allocation, but this is not surprising, as this often happens in declining markets.

Fortunately, overall correlation has been trending down since March 2026. This leads to weaker overall market linkage and a more differentiated trading environment.

Similarly, market volatility has dropped from over 60 in March to over 30 in August. The decline indicates the market is entering a calmer state, readings are now comfortably below risk thresholds.

As market volatility and correlation decline, the only remaining element to start a new bull run is sustainable BTC price growth.

Gacha Cools Down

On-chain gacha is one of the hottest sectors in crypto in 2026, but July marks the first monthly pullback since February.

Total on-chain gacha spending in July was $290.3 million, the second-highest monthly total ever, second only to the record of $354.8 million set in June. For the fifth consecutive month, Collector Crypt was the largest gacha platform, generating $154.9 million in spending, accounting for 53% of July's total. However, Collector Crypt's monthly spending fell 26% month-over-month from $209.5 million in June.

Courtyard set its best monthly record in July, reaching an all-time high of $85.3 million, up 7% month-over-month. Courtyard's performance is particularly noteworthy because it likely has the least crypto-native user base among major platforms. Its continued growth suggests on-chain gacha is a product category that can resonate beyond the existing on-chain user base. Courtyard accounted for 29% of July gacha spending.

Platform rankings also shuffled, with Monster surpassing Phygitals and Beezie to become the third largest gacha platform in July. Monster generated $14.3 million in trading volume, up 15% month-over-month, and released a series of updates aimed at improving user experience:

Lucky Boost - Opening a pack and getting a common card increases the expected value of the next pack by 0.1%

Dupe Shield - Drawing the same card in consecutive packs gives the user a free pack

These updates went live on July 17 and 23 respectively. From the launch of Lucky Boost to the end of the month, Monster generated $9.7 million in trading volume, accounting for 68% of its July total.

Phygitals ($13.4 million, down 34% month-over-month) and Beezie ($12.9 million, down 30% month-over-month) both experienced declining months despite launching important product updates. Phygitals launched a mobile app at the end of the month, while Beezie expanded to Solana on July 23. Overall, the top five gacha platforms (Collector Crypt, Courtyard, Monster, Phygitals, and Beezie) accounted for 97% of July on-chain gacha spending.

Looking beyond on-chain gacha to the broader scope, trading card secondary market volume basically remained at historical highs of $694.7 million, compared to $695.6 million in June. Weakening trading card demand was not the reason for the decline in on-chain gacha in July.

It's also possible that one month of decline doesn't have much to interpret. On-chain gacha spending grew at an alarming rate in the first half of 2026, some degree of pullback was inevitable. However, another possible explanation is that on-chain gacha faces new competition for attention and funds from crypto-native traders.

Throughout July, while Collector Crypt spending declined, Pump.fun trading volume rose. Collector Crypt's daily average spending fell from $5.6 million in the first 7 days of July to $3.4 million in the last 7 days, a 39% drop. During the same period, Pump.fun's daily average trading volume increased from $320.6 million to $388.5 million, a 21% growth. This relationship doesn't necessarily imply causation, but intuitively makes sense. A significant portion of Collector Crypt's user base consists of active on-chain traders who will rotate to any hot sector. When Memecoins regain momentum, some funds and attention flowing into on-chain gacha may shift elsewhere, even if trading card demand remains strong.

Courtyard's performance further supports this possibility. While most crypto-native gacha platforms experienced a pullback, Courtyard hit an all-time high in July. As mentioned earlier, Courtyard likely has the least crypto-native user base among major platforms, meaning its users may be less inclined to flow back into Memecoins when speculative activity heats up.

At present, July's decline looks more like a natural pullback, possibly amplified by the resurgence of Memecoin activity, rather than evidence of a broader slowdown in the trading card market.